Market

1. Good downstream demand: Downstream industries such as chemical engineering have stable demand for replenishment. 2. Port driven: The rise in port coal prices is transmitted to the production areas, leading to strong demand for transportation. 3. Tight supply: Coal mine inventory is at a low level, supporting prices to continue rising.

Price performance:

Yulin, Shaanxi: Coal prices continue to rise, with significant increases in weekly auction prices for some large mines, and local mines generally rising by 5-20 RMB.

Example: Foam coal (CV5900, S0.3) from a coal mine in Shenmu has a tax content of 675 RMB/ton, an increase of 5 RMB.

Ordos: Coal prices rise synchronously.

Example: The tax content at the mouth of washed coal (CV5600, S0.28) is 625 RMB/ton, an increase of 5 RMB.

Port market:

Bullish/bullish factors:

1. Cost support: The increase in origin prices has led to an increase in arrival costs.

2. Low inventory: The inventory of northern ports is at a low level during the same period.

3. Positive Expectations: There is an optimistic expectation for winter coal demand.

Trader behavior: Some traders are reluctant to sell due to this, believing that there is still room for price increases.

Cautious/bearish factors:

1. Weak terminal demand: The actual performance of terminal demand such as electricity is poor.

2. Procurement structure: End users mainly purchase long-term contract coal and imported coal with higher cost-effectiveness, and have low acceptance of high priced market coal.

3. Light trading volume: The actual trading volume of coal in the market is rare, and inquiries mostly come from speculation by intermediaries.

4. Risk accumulation: The short-term rapid rise in prices increases the risk of future market downturns.

Trader behavior: Some traders actively ship goods and are unwilling to excessively chase high prices to avoid risks.

Market expectation: Prices are expected to remain stable and rise in the short term, but upward pressure and risks coexist.

Import market:

Market sentiment: Purchasing sentiment is positive, power plant bidding is active, and bidding prices continue to rise.

Example: The bidding price for 3,800 Indonesian cards has increased to 480-490 RMB; 5,500 calories of Australian coal will be quoted at 810-815 RMB for arrival in South China.

Core advantage: Strong price competitiveness. Compared with domestically traded coal of the same quality, imported coal has a huge price advantage:

Indonesia 3,800 kcal: The landed price in South China is 484 RMB/ton, which is 55 RMB/ton lower than domestic coal.

5,500 kcal in Australia: The landed price in South China is 748 RMB/ton, which is 115 RMB/ton lower than domestic coal.

5,500 kcal on the east coast of India: CIF price of 772 RMB/ton, 92 RMB/ton lower than domestic coal.

6,000 kcal in Europe: CIF price of 779 RMB/ton, 178 RMB/ton lower than domestic coal.

Summary and Outlook

The current coal market presents a pattern of "internal and external differentiation, expected game":

The domestic market is experiencing price strength driven by low inventory and costs, but actual demand support is insufficient, and risks are accumulating at high prices. Traders have divergent attitudes.

The import market, with its huge price advantage, has formed a strong substitution and competition for domestic coal, attracting a large amount of procurement demand, which will suppress the upward space of domestic coal prices.

In the short term, domestic coal prices may remain strong driven by costs and sentiment, but the upward potential will be constrained by weak terminal demand and cheap imported coal. The market needs to closely monitor the real changes in terminal demand and policy trends.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.