Thermal coal supply to northern China ports may decrease next month, as the routine autumn maintenance to coal-dedicated Daqin rail line is reported to last from October 10 to November 3.

 

The upcoming maintenance to Daqin will affect coal arrivals at Qinhuangdao, Caofeidian and Jingtang ports, insiders said.

Another two rail lines of Qiancao (Qian'an, Hebei – Caofeidian, Hebei) and Jingbao (Beijng – Baotou, Inner Mongolia) will also undergo maintenance at the same time, market sources said.

 

Utilities were less willing to take high-priced spot coal, but small and mid-sized end users are making inquiries actively, said a Zhejiang-based trader.

 

Restocking demand did exist, particularly following big fall in coal stocks at Yangtze River and southern China ports, the trader noted.

 

Some buyers are wishing to take 0.8% sulfur 5,500 Kcal/kg and 5,000 Kcal/kg NAR coal offered at 640 yuan/t and 570 yuan/t FOB, he added.

 

Bullish sentiment has been fueled by low supplies from mines and traders' hoarding activities, said a Hebei-based trader.

 

"But I don't believe prices will rise much over the near term," he said. Offer prices for Inner Mongolia 0.6% sulfur 5,500 Kcal/kg and Shanxi 1% 5,000 Kcal/kg coal were at 640 yuan/t and 570 yuan/ FOB.

 

Spot prices of thermal coal drifted further higher at the coastal market, according to a Qinhuangdao-based trader.

 

Cargoes of 0.9% sulfur 5,500 Kcal/kg NAR coal were offered at 640 yuan/t FOB and bid at 630 yuan/t FOB, he said, adding the final transaction price was around 635 yuan/t FOB.

 

Offer price for 0.8% sulfur 5,000 Kcal/kg NAR coal, standing at 570 yuan/t FOB currently, may further rise in later time, he added.

There was a lack of 5,000 Kcal/kg NAR coal at northern ports, said a Tianjin-based trader. Inner Mongolia 5,000 Kcal/kg NAR coal with below 0.8% sulfur was offered at 570 yuan/t FOB, which I think is acceptable for utilities.

 

Traders generally held few spot coal in hand, said a Shandong-based trader, who offered 0.8% sulfur 5,500 Kcal/kg NAR coal at 640 yuan/t FOB.

 

One Inner Mongolia-based trader said he was more bullish about 5,000 Kcal/kg NAR coal than 5,500 Kcal/kg NAR coal.

 

One Shanxi-based trader noted a sparse supply of high-CV coal at Caofeidian port, where Inner Mongolia 5,500 Kcal/kg NAR coal was offered at 645 yuan/t FOB. He also said some deals were clinched on 4,500 Kcal/kg NAR coal at 505 yuan/t FOB.

 

Sales remained dull in recent days, according to a domestic trader, adding buying interest for 5,500 Kcal/kg NAR coal was mostly below 630 yuan/t FOB, to offer prices of 635 yuan/t FOB.

 

One southern utility source said their coal stocks were low, due to previous high power consumption. "We are making large purchases, and fulfillment of long-term contracts was still 90% or so.

Suppliers offered 635-640 yuan/t and 575-580 yuan/t FOB for Shanxi 0.8% sulfur 5,500 Kcal/kg and 5,000 Kcal/kg NAR coal, he said, noting they generally take cargoes at 5 yuan/t lower.

 

On September 7, the Fenwei CCI index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed at 637 yuan/t FOB with 17% VAT, rising 2 yuan/t day on day and up 11 yuan/t week on week.

 

On the same day, the price of domestic 5,000 Kcal/kg NAR coal was assessed at 570 yuan/t, FOB basis with 17% VAT, growing 1 yuan/t from the day ago and up 134 yuan/t from the previous week.

SOURCE: FENWEI ENERGY

 

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