Commodity market report

China coal short-term outlook 2017: onset of heating season weighs on market

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Report summary

In November, thermal coal and metallurgical coal prices fell 5% and 3% month-on-month, respectively. The largest driver of prices was the '2+26' policy getting into full swing as the heating season started in the middle of the month. But other factors were at play. Supply recovered slightly in November as safety-related restrictions were lifted once the 19th National Congress came to an end. That said, we won't see any further increase in domestic supply in December as the new coal capacity needs more time to enter the market. Coal miners and users also started signing long-term contracts for 2018 with similar prices to 2017 but with higher contracted volumes. We expect to see more volumes settled under term contracts in the near future. The contracts will take effect from 1 January 2018 and are being backed by the government in an effort to stabilise the overall market.

What's included

This report contains

  • Document

    cms china short term market report data.xls

    XLS 2.25 MB

  • Document

    China coal short-term outlook November 2017: onset of heating season weighs on market

    PDF 400.15 KB

  • Document

    China coal short-term outlook November 2017: onset of heating season weighs on market

    ZIP 1.79 MB

Table of contents

    • Key market data
    • Heating coal demand underpins thermal coal prices in the near term
      • Key thermal coal prices – history and forecast, US$/t nominal
      • Hard coking coal price arbitrage at Tangshan steel mill, US$/t nominal
    • Onset of heating season reverses decline in thermal coal demand
    • Demand for metallurgical coal softens amid strengthened environmental policies
    • Released capacity taking time to enter the market

Tables and charts

This report includes 10 images and tables including:

Images

  • Monthly coal-fired generation, TWh
  • Monthly hydropower generation, TWh
  • Monthly throughput at Qinhuangdao, Mt
  • Monthly throughput at Huanghua, Mt
  • Monthly hot metal production, Mt
  • Monthly metallurgical coke production, Mt
  • Prices: Image 1
  • Prices: Image 2

Tables

  • Executive summary: Table 1
  • Supply: Table 1

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