China's portside thermal coal market registered higher selling prices but sluggish trading activity, underscoring the perception that sentiment was the main driver to recent rebound rather than changes in the supply-demand fundamentals.
On Mar 9, the 5,500 Kcal/kg NAR thermal coal was mainly offered at 1,160-1,180 yuan/t FOB with VAT at northern ports, compared with 1,150-1,170 yuan/t a day earlier. This has added this week's increase and offset all declines in the past week.
Cargoes of 5,000 Kcal/kg NAR thermal coal were 980-990 yuan/t FOB compared with 970-1,000 yuan/t a day earlier; 4,500 Kcal/kg NAR coal was offered at 860-880 yuan/t, up from 850-860 yuan/t a week ago.
However, the trading activity remained sluggish with most utilities leaving the market again. Only a few small power plants and cement producers were learned to look for prompt cargoes in the market.
A Fujian-based trader sold a 5,500 Kcal/kg NAR cargo to a cement producer at 1,154 yuan/t FOB, and a 5,000 Kcal/kg NAR cargo to a power plant at 1,008 yuan/t.
The highest trading record was 1,040 yuan/t for 5,000 Kcal/kg NAR grade, said a Qinhuangdao-based trader, while bids were generally around 1,000 yuan/t. The trader offered this grade at 1,050 yuan/t FOB, which he disclosed was also his cost to get.
An Inner Mongolia-based trader had a train of 5,500 Kcal/kg NAR coal with 0.4% sulfur, which was discharging at Qinhuangdao port. He planned to sell it at 1,170-1,190 yuan/t, against the cost of around 1,160 yuan/t.
High-CV sales fared not well and the trader shifted his focus to 4,500 Kcal/kg NAR cargoes. The trader now offered this grade at 860 yuan/t for common-quality coal while low-sulfur Shanxi coal was offered at 870-880 yuan/t.
It was felt that the sentiment turned weak since the afternoon of March 8. Many utilities showed no fresh buying interest after completing a round of buying. As the prices go beyond the government's ceilings, utilities, especially state-run ones, gave up floating new tenders for spot coal.
This, as participants pointed out, suggests an impending near-term downturn, as had happened in recent weeks. Unlike the past 2022, when price changes were mostly supported by fundamentals, the spot power coal market has become more volatile so far this year, reflecting the uncertainty and unpredictability of the market.
On March 9, 5,500 Kcal/kg NAR thermal coal traded at Qinhuangdao port was assessed at 1,138 yuan/t FOB with VAT, up 4 yuan/t from a day ago.
The 5,000 Kcal/kg NAR grade was at 964 yuan/t, up 4 yuan/t day on day, and the 4,500 Kcal/kg NAR grade was at 840 yuan/t, a 5 yuan/t rise.
(Writing by Alex Guo Editing by Harry Huo)
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