SunSirs: The Market has Improved, and the Demand for Thermal Coal has been Released to Some Extent

Returning after the holiday, the price index of port thermal coal has once again risen. CCI5500 closed at 860 RMB/ton, CCI5000 at 763 RMB/ton, and CCI4500 at 674 RMB/ton, up 3 RMB/ton, 3 RMB/ton, and 4 RMB/ton respectively from the last period before the holiday.

This week, the power coal market has been operating strongly, with most coal mines in the main production areas maintaining normal production. The market coal supply is basically stable, and downstream demand for replenishment has been slightly released. There has been an increase in the number of transport vehicles in the mining area, and overall shipments have been smooth. There have been more coal mines with price increases, but the overall release of downstream demand is limited, and it is expected that prices will fluctuate slightly in the short term.

The current favorable factors for price increases are mainly reflected in the supply side. On the one hand, the low level of shipping from the production area is lingering, making it difficult for ports to gather resources, and inventory continues to decline, leading to a more prominent structural shortage of some high-quality coal sources. This makes it easy for coal prices to increase, providing direct support for the overall price rebound. On the other hand, the recent strong operation of coal prices in production areas, with significant increases in some regions, has made the situation of shipping inversion more severe, further strengthening the support on the cost side. In this situation, traders have a low willingness to lower prices for shipments, but a strong willingness to raise prices, and prices are more likely to rise than fall.

In terms of imports: The international market for thermal coal is operating steadily with a moderate to strong trend. This week, the Indonesian mining company Q3800 has shown strong upward momentum in its quotation, coupled with the transmission of price increase sentiment in the domestic trade market. A power plant in the South China region purchased Q3800 in bulk at a price of 485-499 RMB/ton, and the final purchase volume increased significantly compared to before, driven by the rising atmosphere. For import traders, their current participation in bidding is mainly based on a slight fluctuation around the cost line, and some power plants have been bidding until December, so they are more cautious about operating in the ultra long futures market. It is expected that the import coal price will remain stable with a moderate to strong trend in the short term. In the future, attention should be paid to the quotation and actual transaction situation of foreign mines.

In terms of origin: The coal prices in some areas of Ordos are as follows: Q5500 is quoted at 640-670 RMB/ton, Q5000 is quoted at 530-570 RMB/ton, Q4500 is quoted at 450-480 RMB/ton. The above are all prices including tax for the pit mouth.

The prices of thermal coal in Yulin, Shaanxi are as follows: Q5500 is quoted at 620-645 RMB/ton, Q5800 is quoted at 680-740 RMB/ton, Q6000 is quoted at 695-780 RMB/ton, and Q6100 is quoted at 740-775 RMB/ton, all of which are prices including tax at the pithead.

The closing price of Q5500 thermal coal at Qinhuangdao Port is 855 RMB/ton, and the closing price of Q5000 is 760 RMB/ton.

In terms of port: On September 20th, the price of Beigang rose, and traders were optimistic about the situation before National Day, with prices remaining firm. The latest eight major power plants along the coast have imported 1.061 million tons and exported 1.179 million tons. According to the latest data from Qinhuangdao Coal Network, on September 20th, Qinhuangdao Port Production Morning News reported that 4,690 trucks were unloaded and 375,000 tons were transferred in; Shipment of 405,000 tons; On site storage of 4.88 million tons (↓3); 12 anchor ships, expected to arrive at 8; Yesterday at 18:00, there were 11.05 million tons (↓2.7) of storage in the surrounding ports at Caofeidian Port; Jingtang Port has a capacity of 5.135 million tons (↑2.4).

In summary, considering the supply-demand relationship, policy regulation, and international market dynamics, the advantage of coal prices after the holiday is obvious, and the trend of mainly rising will be more pronounced with less decline and more increase.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.