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.
It’s 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.
It’s 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.
It’s expected that PCI price next week will increase.
Purchase price of market coal by steel mills increased. Several steel
mills in Qian’an, 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 PCI–Shehua Group (in cash) |
Changzhi |
Yangtze River Port |
Australia/ USD |
Truck delivery by Lu’an Group(in
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.
It’s 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. |