Chinese thermal coal prices showed more signs of stabilizing from previous drops on December 2, with some offers rebounding by 20-50 yuan/t, since demand from chemical and residential customers increased alongside rising cost performance of ex-mine cargoes and cooling temperature.
On December 2, Sxcoal’s daily survey showed among 20 surveyed thermal coal mines, eight mines pushed up prices by 10-110 yuan/t, doubling the number of mines adopting price cuts by 20-40 yuan/t.
“Residential sector presented better demand as the cold wave swept a large swath of China,” said one coal miner in Ejin Horo Banner of Ordos, in Inner Mongolia. This miner lifted his prices for 40-90mm lump coal (CV 6,100, S 0.52%) up by 40 yuan/t to 1,240 yuan/t, mine-mouth with VAT.
Some washing plants were still in suspension due to COVID impact, and current buyers were mainly eyeing long-term contract shipment.
Thermal coal prices in Yulin of Shaanxi sustained upward movement. The prices for slack coal (CV 5,900, S 0.3%) rose 20 yuan/t to 1,180 yuan/t, with total hike at 80 yuan/t this week, mine-mouth with VAT.
Not only chemical producers, but railway stations and heating plants scaled up their purchases. This led many coal trucks come for coal loading, said one miner in Yulin.
Another coal miner contacted by Sxcoal raised offers for slack coal (CV 5,800 S 0.5%) up by 30 yuan/t to 1,180 yuan/t and blending coal up 30 yuan/t to 1,100 yuan/t, both mine-mouth basis with VAT.
In Shanxi, however, thermal coal market remained sluggish. Most thermal coal mines maintained shipment to power utilities at government-set prices, while several mines stopped sales and production with COVID traces. At regions in static management, long-haul coal shipment met barriers.
Cargoes of raw coal (CV 4,300, S 0.9%) in Shouyang county were offered at 850 yuan/t. “Our daily production was around 2,000 tonnes, and we have about 30,000 tonnes in stocks so far due to the epidemic,” the miner noted.
In addition, some miners expressed their concerns that upward momentum for pithead prices could be limited in the short run, since demand hasn’t surged greatly even with temperature slumps recently, and the near-term demand could also be dented by sufficient term contract coal, higher portside stocks and import coal price arbitrage.
One coal miner engaged mainly in chemical coal business said his sales were ordinary for now, it’s only chemical plants that made some buys. “I think it’s hard for coal prices to rise further. Given wide coverage of term contract supplies, only some small-scale demand emerged to meet regular demand for now. So this round of rebounds may be short-lived,” he noted.
Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.
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