- Traders’ speculative buying dominates trade over utilities’ demand
- Rainfall in Ordos disrupts mine output, tightening coal supply
China’s thermal coal market saw another sharp price rally on November 6, as traders continued robust buying amid bullish sentiment about winter heating demand and potential supply constraints.
Under Mysteel’s assessment, spot prices for 5,500 kcal/kg NAR thermal coal at northern transfer ports jumped by Yuan 16/tonne ($2.2/t) on day to Yuan 810/t FOB with VAT on Thursday. The 5,000 kcal/kg NAR grade logged a sharper Yuan 17/t rise to Yuan 718/t, while the 4,500 kcal/kg NAR grade gained Yuan 10/t to Yuan 619/t.
Thursday’s surge extended a week-long rally that started on October 30, when the 5,500 kcal/kg benchmark stood at Yuan 766/t. The latest price marked the highest level since December 11, 2024, and still showed upward momentum for the future sessions.
Some transactions for the 5,500 kcal/kg NAR grade were heard at Yuan 840-850/t FOB at northern ports, while some Inner Mongolia cargoes of this grade were quoted as high as Yuan 845/t, though availability was limited. Shanxi-based 5,000 kcal/kg NAR coal was reportedly sold around Yuan 730-740/t, with traders generally reluctant to sell below Yuan 720/t.
Despite firm prices and growing expectations for demand recovery, trading activity remained dominated by coal traders rather than power utilities, sources disclosed.
“Many utilities in East and South China hadn’t built stocks very well ahead of the National Day holiday (October 1-8), and their inventories dropped quickly afterward. They may start restocking the fossil fuel soon,” one market source said.
As of Thursday, coal stocks at the eight northern transfer ports monitored by Mysteel stood at 22.2 million tonnes, flat from a day earlier and 0.9% higher on week. Rail inflows to these ports on the day were 1.31 million tonnes, roughly matching port outflows.
In key mining regions, thermal coal supply remained in tightness. Rainfall disrupted production in Ordos, Inner Mongolia, further constraining spot availability. Some sources noted that local authorities are closely inspecting coal production discipline, pressuring mines to operate in line with their approved capacity limits.
On the demand side, spot procurement by traders for speculative purpose has become the main driver of the current price rally, while power utilities showed limited interest in buying additional spot tonnages. “The traders’ speculative move is now leading the price surge at the mines, but this won’t be sustainable unless utilities also ramp up purchases,” said a trader based in Inner Mongolia.
As of Thursday, Mysteel’s survey of 138 thermal coal mines across major producing areas showed 53 mines raised prices by an average of Yuan 19/t, while the remaining 85 mines kept prices unchanged.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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