Prices of thermal coal traded at China's benchmark Qinhuangdao port have been stable in the past few days, but still in face of further downward pressure, as the demand hasn't seen any signs of pick-up as coal stockpiles at power plants are yet to reduce markedly.
Presently, thermal coal of 5500 Kcal/kg NAR is quoted at around 650 yuan/t, inclusive of VAT, keeping stable for 3 days after falling 15 yuan/t from 665 yuan/t on Jul 2. The price has dropped 40 yuan/t from a week ago and 105 yuan/t from mid Apr when this round of decline started.
Coal stockpiled at the port was around 8.78 million tons, decreasing 7.2% from the recent high of 9.46 million tons, as outbound shipment was higher than inbound rail supplies following relevant authorities' destocking efforts.
As power demand increases with the scorching summer, power plants are reporting an increase in daily coal consumption, but their socks are still staying at a relatively high level with coverage of 27 days or so, dampening their needs for further purchases in the short run.
Additionally, cheap and ample imported coal is providing more leverage for power plants and posing negative impact on domestically produced coal.
1 Yuan = Rs 8.66
Source: CCR
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