Offer prices of thermal coal moved higher at northern China ports on September 16 as the supply issue remained at play, but trading activity became thin with buyers staying alert on to a potential correction.
On September 16, prevailing offer prices for 5,500 Kcal/kg NAR thermal coal rose to 1,420-1,430 yuan/t, up about 10-20 yuan/t from a day earlier; 5,000 Kcal/kg NAR coal was mainly offered at 1,250-1,270 yuan/t, compared with 1,230-1,260 yuan/t a day ago.
It was learned that 5,500 Kcal/kg and 5,000 Kcal/kg NAR cargoes were already traded at 1,420 yuan/t and 1,250 yuan/t, respectively.
The highest offer was seen at 1,280 yuan/t FOB for 5,000 Kcal/kg NAR coal, said an Inner Mongolia-based trader, noting traders could make a profit of approximately 40-50 yuan/t,
He attributed the price spike to limited availability of saleable cargoes at northern ports. “It is difficult to obtain rail wagons, as most wagons are used for long-term contract delivery,” he said.
This was confirmed by a Zhejiang-based buyer, who said sellers are tough when it comes to bargaining because of a lack of supply.
The trader learned offer prices for 5,000 Kcal/kg NAR rose to 1,260-1,270 yuan/t after a deal done at 1,250 yuan/t a day ago, and an offer of 1,600 yuan/t for Shaanxi 5,800 Kcal/kg NAR cargo.
The trading activity was thin in the market, partly as it was the last trading day of this week. But more importantly, buyers became less urgent to make deals after the NDRC, the country’s top economic planner, warned coal companies to keep prices stable.
A Jiangsu-based trader sold a blended 5,000 Kcal/kg NAR cargo at 1,260 yuan/t on September 16, to a cement planner. “Cement plants are willing to pay higher prices, but their demand has also fallen back,” he said.
Traffic from Inner Mongolia to northern ports was particularly tight. A state-owned coal mining group may raise its purchasing prices for third-party coal after finding it difficult to collect enough coal from other mines in Inner Mongolia.
Ordos, the top coal hub in Inner Mongolia, has cranked up the winter storage for household heating. This part of supply is independent to the long-term contract system but the prices follow the reginal reasonable range set for the contract coal.
In addition, demand from inland non-power factories remained robust, according to mining sources.
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