Downward Pressures Remain In China Coal Market

As small coal mines in Shanxi and Henan provinces resume production while demand still remains low, China's coal market will probably continue its decline in the near future.

Looking at thermal coal, on April 12th China's locally-served power enterprises consumed 1.66 million tonnes, 30,000 tonnes less than on April 6th. They have 28.48 million tonnes of coal stock, which is enough for 16 days' production, one day more than in late March.

Although Qinhuangdao, China's major coal port, saw coal prices rising, coal has started to stockpile again after several weeks of decline and the thermal coal price has fallen in Jiangsu, Anhui, Shanxi and Hebei. Coking coal and lump coal prices hit by the weakened downstream market have also fallen.

Coal demand will continue to be low in the near future and as small and medium-sized coal mines facilitate coal supply, the coal market is predicted to continue its downward trend.

1. Qinhuangdao port

Coal stock increased by a small quantity largely due to a recent influx by rail department of Mongolian, thus coal stocks rebounded slightly. By April 17th stock remained at 3.66 million tonnes, increasing by 120,000 tonnes compared with April 11th. But still, such levels are low and vessels still need to wait for the resources to come up.

Last week all varieties of thermal coal witnessed a CNY 5 to 15 per tonne rise compared with a week earlier.

2. East China

There's simply no driving force for market demand to grow, and coal prices continue to dip. Statistics show that the high grade thermal coal price dropped CNY 10 per tonne at Wanzhai port, Xuzhou, Jiangsu province, and coal stocks fell slightly. In Nanjing and Suqian, it came down by CNY 50 per tonne. In Anhui, Huainan, Huaibei and Suzhou, 1/3 coking coal and medium grade thermal coal declined by CNY 100 per tonne and CNY 50 per tonne respectively.

3. North China

The coal market is still going through a downgrading process. As small coal mines begin to resume production in central and south Shanxi province, coal prices start to fall by CNY 20 to 30 per tonne.

In Jinzhong and Yuncheng, the primary clean coal dropped CNY 60 to 70 per tonne compared with last week.

4. Northeast China
Coking coal prices continue to fall due to weak market demand. In Fushuan and Anshan, the main coal producing areas in Heilongjiang province, coking coal prices slumped by CNY 100 to CNY 200 per tonne.

5. Central south

The coal market remained relatively flat amid downwards pressure. Small and medium-sized coal mines have started to resume production, while market demand has remained as flat as before.

6. Northwest China

The coal market remains weak, and coal prices are still declining. Statistics show in Wuhai, Inner Mongolia, 12 grade primary clean coal dropped CNY 80 per tonne compared with a week earlier. In Shaanxi, coking coal and lump coal dipped by CNY 50 per tonne compared with last week.

7. Southwest China

Trade was thin in the gloomy market. In Liupanshui, Guizhou, primary clean coal was down by CNY 80 per tonne compared with last week. In Anshun, anthracite slack coal edged down by CNY 40 per tonne compared with last week. In Chengdu, Panzhihua, primary clean coal dropped by CNY 200 per tonne from last week.

Source: Steel Guru/My Steel