On Wednesday, Mysteel’s assessments for 5,500 kcal/kg, 5,000 kcal/kg and 4,500 kcal/kg NAR thermal coal all remained unchanged on day at yuan 855/tonne ($118.4/t), yuan 760/t and yuan 665/t, respectively, on FOB basis at northern ports and with VAT.
Portside traders believed that coal restocking appetite from domestic power plants may pick up again in the short run, as temperatures are predicted to rise quickly in many northern provinces of the country, sources shared. The lingering optimism has persuaded them not to give way in price negotiations with end-buyers who kept pressing down prices.
As of 14:00 p.m. on 14 May, some areas in North China’s Hebei and East China’s Shandong had seen temperatures rise above 35 degrees Celsius, and some capital cities like Shijiazhuang, Beijing, Xi’an, Jinan, Zhengzhou and Taiyuan all recorded a new high in temperatures so far this year, according to the National Meteorological Administration.
As a result, total coal throughput from the eight major ports in North China remained lower by a substantial 19.8% on year at 1.21 million tonnes (mnt) on Wednesday, though the volume grew from Tuesday’s low of 1 mnt due to the release of some moderate demand, Mysteel’s survey results show.
In parallel, there were only 53 vessels waiting at the anchorages of these ports for coal loading yesterday, in stark contrast with 79 vessels a year earlier, according to the survey.
Traders’ firm attitude on prices has shut many downstream buyers out the door, a North China-based trader said, adding that end-users have moved to the sidelines since they have mostly stored sufficient thermal coal stocks for near-term consumption.
China’s pithead thermal coal market continued softening on 15 May, as coal transactions further cooled down as the weakened sentiment at the northern ports kept many buyers at bay, Mysteel learned from sources.
Moreover, on Tuesday the average trading prices of various thermal coal grades offered by three major miners under a large coal group in Northwest China’s Shaanxi declined by another yuan 4-20/t in the auction market compared with 8 May, which also reinforced the bearish mood among participants.
On the same day, among the 124 thermal coal mines under Mysteel’s monitoring nationwide, 14 or 11.3% of these mines further cut their coal offers by an average of yuan 14/t, while only six mines lifted offering prices by yuan 11/t on an average.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.