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CHINA COAL MARKET UPDATE: Winter Demand for Thermal Coal Yet to Pick up
Dec 23,2011 09:56CST
industry news
Source:SMM
China's thermal coal market remained weak, but some interest was seen from local traders for overseas cargoes at bargain prices for deliveries over January-February.

BEIJING, Dec. 22 (Platts) -- China's thermal coal market remained weak, but some interest was seen from local traders for overseas cargoes at bargain prices for deliveries over January-February, market sources told Platts this week.

A purchasing executive at a Shanghai-based utility, however, expects a further downward bias after the Lunar New Year period -- late January to early February -- and showed no interest in coal purchases for now.

China's winter season demand for thermal coal remains weak, according to a UOB Kay Hian report Wednesday. China's high level of coal imports are expected to continue to weigh on domestic coal prices, as markets are still wrestling with high inventory at power plants and ports, the report said.

Australian thermal coal with a calorific value of 5,500 kcal/kg NAR is offered at about $96/mt FOB or $109-110/mt CFR for January deliveries, but only a few deals have been reported. These prices are down from $112-123/mt in early December.

Australian thermal coal with a CV of 4,700 kcal/kg NAR is offered at $76/mt FOB or $90/mt CFR, which will translate to $105/mt CFR for 5,500 kcal/kg of coal. A Shandong-based trader considered the price of $90/mt acceptable for 4,700 kcal/kg of Australian coal.

Indonesian thermal coal with a CV of 4,900 kcal/kg NAR is offered at $88/mt CFR for January deliveries, which will translate to $99/mt CFR for 5,500 kcal/kg of Indonesian coal.

FOB prices of 6,000 kcal/kg South African coal NAR have seen a slight upward bias towards $103-104/mt for January deliveries, and landed prices have also edged up to $121-122/mt, from about $120/mt a week ago. Recent purchases from Europe, India and Taiwan are believed to have prompted the upward bias in South African coal prices.

In comparison, the weekly reference FOB price of 5,500 kcal/kg thermal coal NAR was reported by Qinhuangdao Port at Yuan 810-820/mt ($127.8-129.4/mt, or $109.2-110.6/mt without 17% value added tax) Wednesday, down Yuan 10 from the previous week.
 

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