SunSirs: Poor Demand, China Thermal Coal Market is temporarily Stable

Trend of thermal coal market

Last week, the thermal coal market was operating steadily. Most coal mines in the region maintain normal production, with slight fluctuations in overall output. State owned coal mines prioritize long-term cooperative shipping and internal supply. The Daqin Line will end its autumn maintenance today, and transportation order will gradually return to normal. The sales situation of surrounding coal plants is generally average, so their acceptance of high prices is limited and they are not in a hurry to increase inventory.

In terms of imports

The imported thermal coal market is operating steadily. Domestic coastal power plants have successively released their demand for December pallet bidding. It is reported that the bidding range for Q3800 power plants in Fujian region is 496-501 RMB/ton, equivalent to CFR of about 61.8-62.5 US dollars/ton. The profit margin of import traders is constantly shrinking. Although sea freight rates are relatively stable in the international market, there is still no sign of loosening in foreign mining quotations. The FOB price of 3,800 Kabanama ships is around $55/ton, and only a small number of high sulfur pallets have been sold in the market. It is expected that the import market will remain stable and weak in the short term

Origin situation

On October 24th, the market for thermal coal in Ordos was temporarily stable. Most coal mines in the region maintain normal production, mainly implementing long-term cooperative shipping. Some private coal mines have entered the end of month maintenance stage, and the overall coal supply is stable. In recent days, the temperature in northern China has dropped, and the civilian electricity load has increased. The demand for winter storage at downstream terminals has also increased, and the sentiment in the production market has improved. Coal plants and traders have increased their purchasing activities, and the prices of some coal types at the pithead have slightly risen to around 10 RMB/ton according to market trends. But with the support of long-term cooperative coal and imported coal, downstream inventories are still running at a relatively high level, and the overall coal price at the pithead is temporarily stable.

Port situation

The power coal market in Beigang is currently running steadily, and traders still have expectations for the future market, with prices remaining stable and unchanged; In recent days, the inventory of Beigang has continued to rise, and downstream demand has not been released well. Only a small amount of essential needs have been purchased at a discounted price. The transaction price of Q5000 is around 760-765 RMB/ton. The overall market transaction performance is weak, and cautious operation is still needed. In the future, continuous attention should be paid to downstream cargo volume and changes in port inventory. As of October 23, the inventory of the eight ports around the Bohai Sea was 23.155 million tons, a decrease of 20,000 tons compared to the previous day.

Overall, the quantity of imported coal continues to increase; At the end of summer, terminal daily consumption has significantly decreased, and downstream demand is lukewarm. Under the trend of accumulating inventory during the off-season, coal prices may continue to be under pressure.

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