The Asia-Pacific Newcastle coal index has remained at around 14-month highs this week amid buoyant demand and ongoing supply disruptions in Australia and Indonesia.
The Global Coal Newcastle (Australia) index rose by a marginal 0.4% over the past week to USD 106/MT – the highest level since Nov’16.
Newcastle thermal coal shipments were being traded USD 2 higher than the current coal index. However, China’s Zhengzou May’18 thermal coal future contract settled last virtually flat W-o-W at CNY 634/MT (USD 98.50/MT).
Market participants have informed that Chinese miners were struggling to get enough coal to the market, hence the appetite for coal imports were strong among the buyers. It would be interesting to see whether the Chinese government will re-impose the restrictions on imports, if the current situation continues.
China’s National Development and Reform Commission had temporarily lifted the restriction on coal imports in Dec’17, in a view to meet the rising coal demand for the winter season.
According to the vessel Line-up data maintained by CoalMint research, China was the second-largest coal receiver from Australia in CY17, and had imported its highest monthly coal shipment of 8,201,131 MT during Dec’17.
Strong Asian Demand:
While Chinese demand showed signs of temporarily softening ahead of next month’s Chinese New Year holiday, there was lingering support from other Asia-Pacific buyers – such as South Korea and India.
Trading activity from China had slowed down, as the buyers had already booked enough coal shipments for Jan-Feb’18 delivery. However, Indian buyers were active in the market as the need to preserve or rebuild inventories at power plants continues.
According to the data provided by Central Electricity Authority (CEA) coal inventories at 113 Indian coal-fired power plants had rose 1.5% W-o-W to a five-month high of 13.53 MnT.
An Indian Trader had commented even if buying from China is halted after the beginning of their New Year, coal prices would be still supported by strong demand from India.
The persisting weather related disruption to coal supply had also supported the coal prices. Heavy rain had affected loading at Australia’s major thermal coal export port of Newcastle, where currently 14 vessels were said to have been waiting to enter the port, and stocks had risen to a multi-year high of 2.73 MnT.
Source: Vessel Line-up Data, CoalMint Research | Quantity in MnT
Leave a Reply