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China thermal coal market temporarily stable

Steel News - Published on Thu, 09 Aug 2012

China’s thermal coal market is stable for the time being. At benchmark Qinhuangdao port, prices are stabilizing with 5500 Kcal per kilogram NAR steady at CNY 630 per tonne FOB since August 1st 2012 while stocks declined to 7.77 million tonnes as of Aug 7th 2012 the lowest since Jun this year.

Data from industry portal China coal resource showed that the recent heavy rain paralyzed not only the rail transportation system but also the outbound shipment. Coal vessels were severely interrupted by the continued typhoon in the southern coast, leading to a sharp fall in coal shipped out of Qinhuangdao and a steep increase in the number of ships anchored.

The worst impacted provinces are Shanghai and Zhejiang, where power plants have to rely on round-trip vessels for supplies because of limited stockyard, several traders noted. Meanwhile, rail lines including Daqin and Shuohuang have to reduce transports and loadings at coal mines are affected as well.

Traders and miners said that this, however, is seen as a good timing for destocking at downstream power plants. With stocks at key power plants falling to 85.66 million tonnes as of Jul 31st 2012 from 91.24 million tonnes at end Junne, traders generally consider the market demand is improving and have slightly raised their offers since August.

Additionally, impacts from imported coal are waning, as prices of domestic coal at some ports now have dropped to levels of the imported ones. Separately, the Ordos market in Inner Mongolia is picking up, as stockpiles have decreased following a large scale of production cuts and mines suspension and shutdown.

The recent heavy rain not only affected operations of some opencast mines but also interrupted transportation of many rail lines in the area. While saying the Ordos government may cancel the coal price adjustment fund to help miners through the tough time, local sources consider a massive resumption unlikely mainly because of sharply reduced demand.

Source - En.sxcoal.com

(www.coalguru.com)
Posted By : admin on Thu, 09 Aug 2012
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