A rebound of thermal coal prices is taking form at China’s main production areas since coal sales improved after price cuts, and encouraged by coal rises of several high-CV coal grades, sellers’ bullish sentiment intensified.
Sxcoal learned recent supplies to spot buyers contracted further as state-run miners increased their fulfillment rates of long-term contract coal shipment to power utilities amid specific inspections on this issue.
One coal miner in northern Shanxi said all local production was supplied to utilities for power generation amid scorching temperature, while state-owned mines stopped sales to spot buyers and private mines saw hot demand.
The prices of local 5,000 Kcal/kg NAR slack coal with 0.8%-sulfur were at 879-890 yuan/t, mine-mouth with VAT.
Sxcoal’s daily survey data showed five of the surveyed thermal coal mines raised prices by 20-30 yuan/t on July 4, while 13 maintained prices steady. This is partly supported by more available railway wagons, which quickened depletion of previous coal stocks at mines to an extremely low level.
Traders’ buying of thermal coal became more active after coal prices at portside market gradually re-grabbed steadiness. One Shaanxi-based mine said he raised offer prices of 5,600 Kcal/kg NAR slack coal with 0.52%-sulfur by 30 yuan/t to 1,000 yuan/t, mine-mouth with VAT, since spot market saw better demand and basically all coal users activated purchases.
Currently, price increases were generally been seen at mines that previously slashed offers, while some still faced stock pressure.
Another Yulin-based coal mine in Shaanxi noted his prices increased as there were traffic jams at some routes as more buyers sent trucks for coal loading. He added he now offered 0.3-sulfur 5,900 Kcal/kg NAR slack coal at 1,040 yuan/t and lump coal (CV 6,200) at 1,230 yuan/t, both on mine-mouth with VAT basis.
It’s expected that coal sales will improve in the near term as power generators will restock the fuel further to meet the peak electricity demand in the hottest days in summer, and prices may gain more supports from this.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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