SunSirs: The Supply-demand Game Continues, China Thermal Coal Price Fluctuates Narrowly

Origin market: mixed ups and downs, regional differentiation

Price trend: The overall trend shows a mixed pattern of ups and downs. Due to weak demand support, some regions have lowered their prices (such as the cumulative drop of 20 RMB/ton in raw coal from Shengxing Coal Mine), while the prices of high-quality high calorie coal (such as block coal from Simengou Coal Mine) remain strong, indicating structural support.

Auction situation: The market performance is active, with some coal mines experiencing a slight increase in transaction prices, reflecting the release of stocking demand from end-users such as power plants and chemical enterprises.

The temperature in many northern regions is warming up, and the demand for civilian coal is gradually weakening. Qinhuangdao Port has implemented traffic control due to strong winds, which may affect the efficiency of coal shipping in the short term. It is expected that coal prices will mainly fluctuate in a narrow range. It is recommended that downstream users pay attention to weather changes and port dynamics, adopt on-demand procurement strategies, and optimize inventory structure.

Port market: stable but weakening, with light trading volume

Overall situation: The market is showing a stable but weakening trend, with sluggish transactions. High inventory and weak terminal demand are the core factors that suppress prices. The mainstream coal prices remain stable: 5,500 kcal is priced at about 710 RMB/ton, and 5,000 kcal is priced at 620-625 RMB/ton.

Low calorie coal (4,500 kcal) has been relatively active in inquiries due to its price being lower than the long-term contract price, with a slight fluctuation in the quotation between 525-535 RMB/ton. Trading situation: Traders have a willingness to raise prices due to inverted shipping costs. End users (power plants) mainly purchase long-term contract coal, and their willingness to receive market coal is extremely low, resulting in few actual transactions in the market.

Imported coal market: sluggish demand, weak prices

Overall situation: sluggish market demand and weak prices. The cost-effectiveness advantage of domestic coal and the sufficient supply of domestic long-term contract coal have seriously weakened the purchasing attractiveness of imported coal. The FOB price for 3800 kcal in Indonesia is approximately $45 per ton. The domestic port price of 5500 kcal in Australia has increased by about 710 RMB/ton, and the price difference with domestic coal continues to narrow.

The prices of other varieties such as Russian coal are also showing a downward trend.

Demand side: The pace of domestic power plant procurement for essential needs has slowed down. The East China market prefers low-priced domestic coal; The South China market is affected by tight import quotas and only maintains a small amount of essential purchases.

Supply side: The stable coal production and sufficient supply of major international exporting countries (Indonesia, Australia) have further intensified downward pressure on prices.

In summary, the current thermal coal market presents a pattern of "sluggish domestic demand, weak external demand, and overall pressure": although the production areas have structural support, overall demand (especially for civilian use) is weakening; The combination of high inventory at ports and low purchasing willingness at terminals has led to a stalemate in coal trading in the market, resulting in a lack of upward momentum in prices. Due to the decrease in cost-effectiveness and sufficient domestic supply, the competitiveness of imported coal has weakened, and prices are under pressure simultaneously.

Short term outlook: In the absence of strong driving factors in the market, it is expected that coal prices (both domestic and imported) will mainly maintain a weak oscillation or bearish trend, with limited upward space. The progress of port inventory digestion and the release of actual terminal demand will become key observation points affecting the future market.

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