China coal short-term outlook January 2022 Report

Commodity Market Report 27 January 2022

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Report summary

Figures for the domestic thermal coal market have been interesting of late. China reported record-high output for the third consecutive month but the QHD price is still increasing. Coal inventory at ports fell but stockpiles held by gencos increased. Meanwhile, Indonesia announced a temporary ban on coal exports. Steel mills continued to recover operations in the absence of new policy restrictions from the government. Coking coal and coke demand was driven up, and prices increased. However, we expect the Winter Olympics and Chinese new year holiday will suppress coking coal consumption. As such, the domestic premium coking coal price will eventually drop to RMB2,500/t in February. Read our report for more details.

Gencos build inventory to guarantee supply for Winter Olympics
Poorly timed price increases do little to benefit cokemakers
China reports lowest Q4 GDP growth in the past two decades (excluding 2020)
Resumption of BOFs provides temporary support for coking coal price
Record-high production owing to government’s policy to stabilise prices
December increase couldn’t reverse overall decline in coking coal imports in 2021