SunSirs: Coal Prices Break 900 RMB/Tonne! Hitting a Two-Year High

Recently, coal prices at production sites have surged, significantly driving up shipping costs. Coupled with declining inventories at northern ports and sellers holding back stock to maintain high prices, spot market quotes have remained strong. As of September 2, the "CCTD Bohai Rim Thermal Coal Spot Reference Prices" for the 5500K, 5000K, and 4500K grades closed at 907, 818, and 734 RMB/tonne, respectively—marking daily increases of 9, 10, and 10 RMB/tonne and hitting new highs not seen in nearly two years.

Moving forward, attention should be paid to the following points:

1. Monitor the recovery of coal supply at production sites

In early September, production quotas at major coal-producing mines were relatively ample. With the end of the main flood season in the north, the impact of rainfall on mining operations is expected to gradually diminish, raising hopes for a marginal improvement in domestic coal supply. However, safety inspections remain rigorous, the resumption of operations at suspended mines is slow, and active mines are maintaining a cautious production stance. Consequently, barring the introduction of strong supply-guarantee policies, a significant increase in coal supply from production sites is unlikely in the short term.

2. Monitor inventory fluctuations at northern ports

Recently, the rapid rise in coal prices at production sites has led to a severe price inversion regarding shipments to ports. Daily shipment volumes on the Daqin Railway have dropped below 800,000 tonnes, resulting in reduced inflows and continued inventory depletion at northern ports. Data from CCTD (China Coal Market Network) indicates that coal inventories across nine major northern ports have fallen to approximately 24 million tonnes—a drop of about 11% from recent highs—while the year-on-year growth rate has narrowed to around 8%. Looking ahead, given the backdrop of strict safety oversight, the recovery of coal supply at production sites remains sluggish; shipment volumes to ports are likely to stay low, and coal inventories at northern ports may continue to decline.

3. Monitor changes in end-user procurement demand

First, as temperatures drop, residential electricity demand will gradually decline, leading to an expected decrease in daily coal consumption at power plants; however, given current low inventory levels, power plants are likely to maintain essential procurement. Second, while the arrival of the "Golden September" peak season is expected to boost procurement demand from non-power sectors, significant growth in thermal coal demand from these industries is unlikely; this is due to factors such as the real estate market remaining sluggish and insufficient effective demand dampening the growth of manufacturing investment.

In the short term, following the peak season for power-sector coal consumption, the actual impact of "Golden September" on non-power industries remains to be seen, and overall end-user procurement demand is unlikely to show significant growth. Nevertheless, due to the slow recovery of coal supplies at production sites and continuously declining coal inventories at northern ports, the market will remain characterized by tight supply and demand, and coal prices are expected to remain firm. (China Coal Market)

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.