Thermal coal prices at Chinese key mining areas continued to increase on August 15 as more downstream buyers sent trucks for coal loading, and some mines even saw longer truck queues than previous days.
Higher demand for coal grades that can be blended in coke production is a part of reason for the red-hot sales. Coke makers were ramping up production recently since profits were partly restored after the first round of price rise, and this also boosted demand for coal grades for both coking and power generation purposes.
Chemical plants, traders and civil customers also increased coal replenishment, which helped driving up coal prices. Yet cement plants were seemingly sidelined. After cement makers in Jilin, Heilongjiang and Liaoning were asked to suspend operations for 30 days from August 1, Sxcoal learned that their peers in Shandong will also halt production for 15 days.
In addition, spot thermal coal prices also started increasing. “We heard spot offers of low-sulfur 5,000 Kcal/kg NAR thermal coal were up to 1,050 yuan/t FOB today. Spot stocks fell quickly at northern ports since traders’ coal shipments from mines slowed down due to several days of rainfall,” said one large coal supplier.
Regionally, three main coal production provinces — Shanxi, Shaanxi and Inner Mongolia – all reported higher coal prices.
In Ordos of Inner Mongolia, thermal coal prices gained strengths from exclusive shipment to power utilities and internal plants, which still choked deliveries to spot buyers.
“Our prices kept rising with good sales, and we stopped all shipment of slack coal to spot buyers,” said one Ordos-based miner, adding his offers for 5,500 Kcal/kg NAR thermal coal were 850 yuan/t, mine-mouth with VAT.
Sxcoal founded after price increases for several days in a row, slack coal (CV 6,200, S 0.6%) prices in Yulin of Shaanxi mainly ranged from 1,030-1,060 yuan/t, mine-mouth with VAT.
Coal washing plants in Shanxi re-started purchases after week-long suspension due to difficulties to source cargoes. The better spot market sentiment spurred them to re-enter the market.
“More trucks arrived from days before, and our offers rose 10-20 yuan/t each day continuously,” said one coal miner in Datong. He offered 5,500 Kcal/kg NAR blending coal at 920 yuan/t, up 30 yuan/t.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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