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China coal short-term outlook February 2018: price cap adds to Chinese New Year lull

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05 March 2018

China coal short-term outlook February 2018: price cap adds to Chinese New Year lull

Report summary

Thermal coal prices continued their upward trend in the first week of February to reach RMB780/t. In response, the NDRC capped QHD FOB 5500 at RMB750/t from 5 February. This move dampened spot thermal coal market activity so many traders left early for the Chinese New Year holiday to avoid losses. Industrial activity resuming after the holiday will result in strong demand from the beginning of March. However, we do not believe thermal coal prices will duplicate the high post-holiday jump seen last March because there is more supply capacity this year and the new price cap looms. Like thermal coal, the metallurgical coal market has remained in tight supply during the winter. We believe the situation will not improve in the spring as this will be when mills ramp up output. Although some regions have extended industrial restrictions beyond the middle of March, they will have little impact.

Table of contents

    • Key market data
    • NDRC caps Qinhuangdao prices at RMB750/t
    • Tight supply supports robust metallurgical coal prices
      • Key thermal coal prices – history and forecast, US$/t nominal
      • Hard coking coal price arbitrage at Tangshan steel mill, US$/t nominal
    • Strong thermal coal demand but cheerless spot demand
    • Holiday slowdown takes heat out of metallurgical coal demand
    • Government encourages sustained coal output during winter

Tables and charts

This report includes 10 images and tables including:

  • Executive summary: Table 1
  • Monthly coal-fired generation, TWh
  • Monthly hydropower generation, TWh
  • Demand: Image 3
  • Demand: Image 4
  • Demand: Image 5
  • Demand: Image 6
  • Supply: Table 1
  • Prices: Image 1
  • Prices: Image 2

What's included

This report contains:

  • Document

    cms china short term market report data.xls

    XLS 2.31 MB

  • Document

    China coal short-term outlook February 2018: price cap adds to Chinese New Year lull

    PDF 391.37 KB

  • Document

    China coal short-term outlook February 2018: price cap adds to Chinese New Year lull

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