Coal stocks at China’s benchmark Qinhuangdao port stayed at a high level lately, and may further climb before the coming summer peak season.
Port of Qinhuangdao is a seaport on the Bohai Sea in Hebei, China. It is the main transiting port for coal with designed output capacity of 226.35 MnT per year.
Coal stocks have been increasing continuously at the port as the coal miners transport their excess coal to the northern ports.
Coal production in Shanxi, Inner Mongolia and Shaanxi rose 5% Y-o-Y in Apr’17. In order to dispose of their coal stocks, miners were willing to sell their coal at low prices, as they were forced to clear coal stock on account of strict environmental norms for pollution.
Coal stock at the Qinhuangdao port was recorded at 5.84 MnT as on 22 May’17, increasing 15.3% Y-o-Y.
Earlier, coal stock in the Qinhuangdao and other northern ports were largely affected by demand from power utilities. However, environmental norms imposed by authorities have weakened demand from power sector.
Daily average coal supply by railway to the port was recorded 612000 MT over 1-7 May’17, which was superior to the daily outgoing coal shipment average of 552000 MT during the same week.
Outgoing coal shipments from the port increased recently, with a total of 4.15 MnT during 15-21 May, compared with 4.14 MnT of coal inflow via rail, reflecting an uptick in demand from utilities.
Coal demand at Chinese utilities increased during May’17, as daily coal consumption at six major coal companies rose from 587600 MT over 1-5 May’17 to 612400 MT over 15-19 May’17.
Still, Coal stockpiles at the port are expected to further rise in the near future, given continued rail inflows and moderate restocking by utilities before the summer peak season.
Thermal Coal Prices:
Thermal coal prices were still on the decline in the domestic market. Spot prices for Chinese 5500 NAR thermal coal, FoB Qinhuangdao stood 562 Yuan/MT as on 19 May’17, down 8.9% from 617 Yuan/MT recorded on 2 May.
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