The reference spot price for CCTD Bohai Rim is 650 RMB/ton (-2 RMB) for 5,500 kcal, 593 RMB/ton (-1 RMB) for 5,000 kcal, and 523 RMB/ton (-1 RMB) for 4,500 kcal.

CCI index 5,500 kcal: 665 RMB/ton (-2 RMB), 5,000 kcal: 591 RMB/ton (-2 RMB), 4,500 kcal: 522 RMB/ton (-1 RMB)

Price decline factor

Demand side: Low power plant procurement: Coastal power plants maintain inventory availability for more than 20 days, coupled with an increase in hydropower output (due to excessive precipitation in the Yangtze River Basin in April), resulting in a decrease in thermal power load rate to 60% -70%, only maintaining rigid operation.

Dragged by non electric industries: The cement and chemical industries have been affected by environmental restrictions and profit compression, resulting in a 5% -8% decrease in operating rates compared to the same period last year, and a sharp decline in demand for low calorific value coal (4,500-5,000 kcal).

Supply side: High port inventory: The inventory of ports around the Bohai Sea has exceeded 30 million tons (+15% year-on-year), with over 60% of low calorie coal below 5,000 kcal accounting for structural overcapacity suppressing prices.

Long term coal squeezing spot: In April, the long-term contract fulfillment rate increased to 100%, and end users turned to low-priced long-term contract resources, resulting in a continuous decline in spot market liquidity.

The impact of imported coal is intensifying

The landed price of thermal coal (5,500 kcal) at Russian Far East ports is quoted at 630 RMB/ton (including tax), which is 35 RMB/ton lower than the domestic spot price, stimulating South China power plants to increase import procurement.

Price performance and market sentiment

The premium for calorific value has narrowed: the price difference between 5,500 kcal and ,5000 kcal has decreased from 90 RMB/ton in March to 72 RMB/ton, reflecting the weakening demand for high calorie coal and the reduced sensitivity of the market to calorific value.

Traders' mentality differentiation: Some traders have lowered prices and sold goods due to financial pressure, but the available spot goods (5,500 kcal) at the port are only about 500,000 tons, and their willingness to raise prices has increased due to cost inversion.

Short term market outlook

Limited downward space: Cost support is evident: the cost line for Shanxi Kengkou 5500 kcal is about 620 RMB/ton, and the port shipping closing price is inverted by 10-20 RMB/ton, further price reduction or triggering production reduction.

The maintenance of Daqin Line has been completed: after May 1st, railway transportation capacity will resume, and the import volume of Beigang may increase to 1.3 million tons/day, easing the structural surplus pressure of low calorie coal.

Lack of upward momentum: slow inventory turnover: Based on current daily consumption, Beigang inventory needs to return to a reasonable range in more than 2 months to suppress price rebound expectations.

Alternative energy suppression: The outflow of the Three Gorges Reservoir in May is expected to increase by 10% year-on-year, and the proportion of new energy generation may exceed 25%, squeezing the space for thermal power.

At the end of April 2025, the thermal coal market was in a transitional stage from "weak reality" to "weak balance", with prices fluctuating narrowly around the cost line (5,500 kcal 640-670 RMB/ton). It is recommended to pay attention to the pace of non electricity demand recovery in May and the speed of inventory turnover in Beigang. If the growth rate of industrial electricity exceeds expectations, there may be opportunities for a temporary rebound in the third quarter.

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