Coal shipments via China's Daqin railway increased significantly in March, possibly to make up for the supply decline in April when it undergoes routine spring maintenance.
Last month, 36.95 million tonnes of coal were shipped by the line, rising 16.23% from February, but down 4.94% from a high base in the year ago, operator Daqin Railway Co., Ltd. said in a monthly report.
The daily shipments averaged 1.19 million tonnes in March, up 4.98% from February's 1.14 million tonnes. There were 79.9 heavy trains delivering coal via the line each day in the month, including 58.8 large heavy-haul 20,000-tonne trains.
The notable increase in March was related to the railway's spring maintenance in April, analysts noted. The line undergoes regular maintenance in April every year when coal consumption is in a seasonal low, so there's usually a a strong increase in March to avert a slump in stockpiles at ports during the maintenance.
Historical data showed Daqin's shipments usually hover around high levels in March, though sometimes lower than November-December, the key period for utilities to restock ahead of the coldest winter season.
Since the maintenance began on April 6, its daily shipments have fallen indeed. Sxcoal learned that the railway's shipments fell to 1 million tonnes on April 6 from 1.15 million tonnes a day earlier, and maintained around 1 million tonnes thereafter. This compares with 1.25 million tonnes in the first two days of this month.
While the impact of Daqin's maintenance has moderated over the years, the change of its daily shipment is still a key indicator to measure the supply situation for the spot market.
The railway's accumulative shipments totaled 104.53 million tonnes in the first three months of this year, only representing a 0.59% rise year on year. This is notably lower than that of the same quarters in 2018, 2019 and 2021.
High prices have restricted the shipments from mines to ports. Currently, the benchmark spot prices are about two or three times the levels in the same period of 2018-20. At the same time, coastal end users cranked up imports, resulting in reduced purchases from northern transfer ports.
In 2023, Daqin line is scheduled to complete a series of infrastructure recreations and updates, aiming to haul 417 million tonnes of coal throughout the year.
(Writing by Alex Guo Editing by Harry Huo)
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