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Weekly Report of China Coal Market for September 30-October 10, 2020

http://en.steelhome.cn [SteelHome] 2020-10-12 09:48:46

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Abstract

Last week, domestic coal market was robust; metallurgical coal demand picked up; inventory of thermal coal at ports was a low level while price at origin and ports kept increasing.

Its expected that price of domestic coking coal and PCI will increase amid stability; price growth of thermal coal at ports will slow down yet that at origin will stay at a high level.

I Reviews on Chinese domestic coal market for September 30-October 10, 2020

1.1 Coking Coal Market

Last week, price of coking coal rose by 10-30 yuan/t; that of rich coal, 1/3 coking coal in Linshi, Shanxi jumped by 30 yuan/t; that of gas coal in County Xingxian, Lvliang grew by 20-30 yuan/t; that of mid- and high-sulfur coking coal was stable in recent days, which might see an increase of 10-20 yuan later.

Low-sulfur coking coal and 1/3 coking coal in Linfen were in smooth delivery with no inventory left, price of which also picked up by 20-30 yuan/t.

Price of lean coal, lean and meager coal in Changzhi jumped by 10-20 yuan/t; that of gas coal in Zichang, Shaanxi grew by 40 yuan/t.

Its expected that coking coal price will increase in the following week.

Quotation of Australian coking coal declined. Price of I grade coking coal dropped by $4.5 to $144-145 per ton; that of standard I grade coking coal dipped by $5.5 to $134.5-137 per ton; that of II grade coking coal declined by $4 to $121-122 per ton.

Price of Mongolian coal was expected to be stable; that of Mongolian 5# raw coking coal (A14.5) at ports was 800-810 yuan/t (in cash), some at 820 yuan/t.

Trading tips: Coal mines are suggested to focus on safe production; traders focus on customs clearance volume of Mongolian coal; Downstream steel mills and coking plants are advised to purchase as needed and add inventory properly.

Table 1: China Coking Coal Price for September 30-October 10, 2020 (yuan per ton)

Domestic coking coal index

Hard coking coal at Australian Peak Downs mine

Coking coal

Rich coal

1/3 Coking coal

Lean coal

Gas coal

Anze, Shanxi

Liulin, Shanxi

Tangshan, Hebei

Lingshi, Shanxi

Linfen, Shanxi

Zaozhuang, Shandong

Changzhi, Shanxi

Jining,

Shanxi

2020/10/10

1283

144.75

1310

850

1380

980

980

970

760

840

2020/9/30

1283

149.5

1310

850

1380

980

980

970

760

820

Change

0

4.75

0

0

0

0

0

0

0

20

1.2 PCI market

Price of domestic PCI on a long-term contracted basis mainly increased by 30 yuan/t.

Price of coal from local mines in Yongcheng, Henan together with Changzhi and Jincheng, Shanxi rose by 20-30 yuan/t.

Price of PCI at East China ports rose amid stability.

Price of PCI from large mines on a long-term contracted basis in October and the fourth quarter was not issued yet, which was expected to rose by 20-30 yuan/t.

Its expected that PCI price next week will increase.

Purchase price of market coal by steel mills increased. Several steel mills in Qianan, Hebei made two rounds of bids, in which price of anthracite rose by 60 yuan to 889 yuan/t and that of PCI bituminous jumped by 18 yuan to 693 yuan/t.

PCI inventory in 70 steel mills rose by 39,000 t to 2.167mn t and its available days jumped by 0.4 day to 17.9 days.

Trading tips: Steel mills should purchase goods as needed and increase inventory properly.

Table 2: China PCI Price for September 30-October 10, 2020 (yuan per ton)

Price in spot market

PCI Anthracite

Bituminous PCI- Yangtze River Port

Price adjustment

PCI Anthracite

Bituminous PCICShehua Group (in cash)

Changzhi

Yangtze River Port

Australia/ USD

Truck delivery by Luan Groupin cash

Yangquan Coal Industry Group 4#

Yongcheng Coal & Electricity Holding Group (FOB price)

2020/10/10

760

820

90.5

700

2020/10/10

780

730

830

668

2020/9/30

760

815

93.5

690

2020/9/30

750

730

800

639

Change

0

5

3

10

Change

30

-

30

29

1.3 Thermal

Price of thermal coal kept increasing. At northern ports, market after holidays got boosted by released demand. Due to overhaul of Daqin line, inventory at ports was at a low level, thus market price continued to increase.

At origin, output of Shanxi and Inner Mongolia at the beginning of this month picked up according to the notice.

Price of thermal coal kept increasing. After holidays, inspection in main production area remained strict and more and more coal mines suspended their operation due to limited coal permissions. At the same time, power plants were active in replenishing stock.

Its expected that growth of thermal coal price at ports will slow down while that at origin will be at a high level.

Trading tips: traders should transact in a flexible way.

Table 3: China Thermal Coal Price for September 30-October 10, 2020 (yuan per ton)

Shanxi

Qinhuangdao

Taihe Port

Inner Mongolia

Guangdong

Henan

Shandong

Anhui

Jiangxi

Spec.

Q:5800

Q:5500

Q:5500

Q:5200

Q:5500

Q:4000

Q:5000

Q:5000

Q:4800

2020/10/10

535

616

645

574

700

400

560

610

520

2020/9/30

535

613

640

539

685

400

550

610

520

Change

0

3

5

35

15

0

10

0

0

II Market news

u Indonesia coal benchmark price in October was $51 per ton, getting rebounded after six straight falls.

Shandong 2020 coal de-capacity target rose by 16.27mn t to 26.21mn t.

III Inventory at coking coal inventory

Coking coal inventory in domestic independent coking plants picked up.

High capacity utilization rate of coking plants gave firm support to coking coal demand.

This week, capacity utilization rate of 100 coking enterprises was 90.04%, up 0.18% from last week.

After holidays, coking plants slowed replenishment down, thus coking coal inventory would decline in this way.

As of October 9, coking coal inventory in 100 independent coking plants was 7.726mn t, up 439,500 t from 2019 average.

Table 4: Coking Coal and Coke Inventory in China Independent Coking Plants for September 30-October 10, 2020

Area

Number of Companies

Total Capacity

(10,000 tons/year)

Capacity Utilization%

Coke Inventory (10,000 tons)

Coking Coal Inventory (days)

Coking Coal Inventory

(10,000 tons)

09-October

Up/down

(10,000 tons)

Up/Down

MoM%

Available Days

Up/Down

MoM%

(10,000 tons)

Up/Down

MoM%

Northeast China

8

825

82.94

1.46

4.5

-0.5

-10

31.5

0.5

1.61

12.7

-0

-0

North China

51

8663

89.72

0.19

3.3

-0.3

-8.33

392.9

-1.7

-0.43

13.7

-0

-0

East China

21

3960

95.35

0

0.3

-0.3

-50

222.9

5

2.29

16.5

0.4

2.48

Central South China

9

1480

87.94

0

0

0

0

47.6

-0

-0

10.1

-0

-0

Southwest China

4

705

74.29

0

0.2

0

0

42.9

-1.2

-2.72

22.6

-0.7

-3

Northwest China

7

1140

91.58

0

0.9

0

0

34.8

0

0

8.9

0

0

Total

100

16773

90.04

0.18

9.2

-1.1

-10.68

772.6

2.6

0.34

14

0.1

0.72

IV Ocean freight

The international shipping price index fell after soaring. As of October 9, the dry bulk freight index BDI of the Baltic Trade Shipping Exchange reached 1892 points, an increase of 167 points or 9.68% from the 1725 points on September 30 before the holiday, and the highest during the period was 2097 points.

At present, the sea freight from Brazil to China is 20.122 yuan/t (Cape of Good Hope); the sea freight from Western Australia to China is $9.709 per ton (Cape of Good Hope); and India to China is $12.95 per ton (Handy).

Last Friday, the freight from Qinhuangdao Port to Guangzhou Port was 24.2 yuan/t, an increase of 2.4 yuan/t from last weekend; the freight from Qinhuangdao to Fuzhou was 23.9 yuan/t, an increase of 1.5 yuan/t from last weekend; the freight from Qinhuangdao to Shanghai Port was 20.2 yuan/t, up 3.1 yuan/ton from last weekend.

V In the following week, focus on:

1) inventory in coal mines, price adjustment and safety inspection;

2) changes in steel mills and coke market and production limitation in autumn and winter;

3) changes in Mongolian and Australian coal customs clearance volume.

4) changes in spot goods at ports.

Positive factors: 1) High operating rate of steel mill and coking plants indicated great demand; 2) The fourth round of coke price hike was settled; 3) Coking coal supply was in shortage which could not be eased in a short term in view of increasing safety inspections.

Negative factors: 1) High customs clearance volume of Mongolian coal gave a shock to domestic coking coal; 2) Supply will be limited given that increasing coking plants and steel mills have to limit their production in the autumn and winter.


(To contact the reporter on this story: RhettLiu@steelhome.cn or 86-555-2238927 18133440120)
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