China’s portside thermal coal prices stayed broadly unchanged on August 5 boosted by emerging demand from cement and chemicals, although utilities remained on wait and watch.
On August 5, the benchmark 5,500 Kcal/kg NR thermal coal offers were around 1,145-1,150 yuan/t FOB at northern ports, while 5,000 Kcal/kg NAR coal was mainly offered at 1,000-1,030 yuan/t, according to traders.
In some individual deals, prices exceeded the general offers. A cement producer based in East China purchased 150,000 tonnes of 5,000 Kcal/kg NAR cargoes with 0.6-0.8% sulfur; 100,000 tonnes were traded at 1,048 yuan/t FOB Caofeidian port and the remaining 50,000 tonnes were done at 1,050 yuan/t.
As of August 4, the cement industry in many places has completed the first round of price hike ranging from 40 yuan/t to 100 yuan/t, driven by increased costs and improving production.
“We have noticed the cement industry is in the process of recovery with the production slightly up recently,” said a Shanghai-based cement producer. “While we are not too confident of the economic situation, infrastructure construction will resume continuously as the temperatures go down.”
The cement maker has bought more than 100,000 tonnes of spot thermal coal in recent days. However, the source also believed the market is still difficult to increase substantially.
“The market is full of uncertainties. We need to keep an eye on stockpiles at power plants and the safety inspection during the 20th CPC National Congress,” he said. The political gathering is set to convene in the second half of the year.
As of end-July, coal stockpiles fell to around 12 days of use at coastal power plants, while inland power plants held stocks worth of 19-20 days, sources reported. The daily consumption has jumped notably since last week as the heat reappeared.
An Inner Mongolia-based trader sold a 5,500 Kcal/kg NAR cargo with 0.4% sulfur at 1,140 yuan/t. The trader reported coal prices rose modestly at mines in Inner Mongolia, driven by demand from the northeastern provinces, which are set to start heating as early as late September.
The trader also reported a deal for 5,500 Kcal/kg NAR at 1,130 yuan/t, bought by a cement producer from the south.
The availability of saleable spot cargoes remained limited in the market, said a Shandong-based trader. With increasing industrial activity, coal demand has improved modestly, especially for 5,000 Kcal/kg and 4,500 Kcal/kg NAR goods.
Coupled with a fall in stockpiles at ports along the Yangtze River and persistent high temperatures in the east, the market was supported in the near term, he said.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
Leave a Reply