中文
China's portside thermal coal prices soared on February 23, fueled by the mine accident in Inner Mongolia, although the actual demand didn't increase significantly.
On February 23, many traders raised their prices to 1,150-1,170 yuan/t FOB with VAT for 5,500 Kcal/kg NAR cargoes at northern transfer ports, compared to 1,080-1,100 yuan/t a day earlier. This was the largest single-day rise during this round of rally since last week.
Likewise, offers for 5,000 Kcal/kg and 4,500 Kcal/kg NAR coals increased to 1,050-1,060 yuan/t and 860-900 yuan/t, respectively, against 920-930 yuan/t and 780-790 yuan/t a day ago.
Trading prices also increased but mildly. According to traders, several parcels of Shanxi 5,000 Kcal/kg NAR coal with 0.6-1% sulfur was traded at 1,000-1,020 yuan/t FOB, while an Inner Mongolia 5,500 Kcal/kg NAR cargo with 0.6% sulfur was traded at 1,190 yuan/t and another 5,500 Kcal/kg NAR trade was done at 1,155 yuan/t.
With bullish sentiment spurred by the mine accident, some traders even pegged their quotations at 1,200 yuan/t FOB for 5,500 Kcal/kg NAR grade, almost touching the level before the Chinese New Year holiday.
Power plants were uncomfortable with this wave of price increase, arguing it was led by the market speculations rather than a change in the supply-demand fundamentals.
A decline in shipping rates seems to indicate the overall demand is actually still in low levels. The shipping rates for 60,000-70,000 DWT vessels on the trip of Qinhuangdao-Guangzhou were assessed at 34.9 yuan/t, down 1.4% from the previous day.
"People are just using the mine accident to drive the market to increase further," said a Guangdong-based utility source. Some traders warned "such a furious increase has made the market more volatile."
After the collapse at Xinjing opencast mine in Inner Mongolia on February 22, the local authorities ordered all opencast mines in the region to conduct self-examinations to rule out potential risk of collapse, and no operations are allowed until the self-examination is completed.
However, according to market sources, the majority of opencast mines are running normally, and only a few reduced production and sales to facilitate the self-check. Operations at underground mines are not affected so far. In neighboring Shanxi province, mines received warnings but their operations haven't yet been affected either.
These phenomena shows the government may have no intentions to expand the scale of safety inspections, and the overall supply is high likely unaffected by the accident, even it nears the "Two Sessions", the annual political gatherings in early March.
On February 23, 5,500 Kcal/kg NAR thermal coal traded at Qinhuangdao port was assessed at 1,155 yuan/t FOB with VAT, up 52 yuan/t from a day ago.
The 5,000 Kcal/kg NAR grade was assessed at 994 yuan/t, up 50 yuan/t from a day earlier, and the 4,500 Kcal/kg NAR grade was assessed at 853 yuan/t, a 53 yuan/t rise.
The rapid rise in domestic market prices may prompt coastal power plants to purchase more imported coal, which in turn will drive up the imported coal prices.
(Writing by Alex Guo Editing by Tammy Yang)
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