Friday, May 20,
Coal prices in China have reached its peak on Friday.Daily prices of coal with a heating value of 5,500 kcal/kg NAR climbed to 825-835 yuan ($128.37)/MT,.* while 6,000 kcal/kg coal also rose by 5 yuan to reach 875 yuan/MT.
With demand to reach its peak in summers, which typically starts in late June and lasts through August, still some weeks away, coal prices are expected to head further north as power plants scramble for coal supplies.
With the surge in coal prices, power prices are also expected to rise. And China has no other option but to roll out power from energy intensive industries and pass it on to household users.
Deutsche Bank AG says, “Iron ore prices may fall next week on speculation of power shortages in China which might force steel mills to cut output”
“Continued softening” lies ahead, though prices “could find a point of stabilization,” said Thomas Baldwin, an iron-ore, freight and steel trader at Deutsche Bank in London.
“With potential power shortages, the uncertainty is meaning the mills are operating on a hand-to-mouth basis,” Baldwin added.
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