China coal short-term outlook January 2023
The coronavirus pandemic affected China’s economy again in December. However, the recovery of some key economic indicators – domestic consumption, manufacturing PMI, and others – shows that the economy is recuperating. Far from boosting the economy though, coal prices fell because of record-high coal inventory at ports at the end of January. We expect the high stock levels will persist in dragging the price down in February. The reviving economy will be the first driver of coal prices in the coming months. Price weaknesses also emerged in the coking coal market, as companies completed their restocking and the transactions were scarce. High expectations for the recovery of steel demand encouraged steel mills to maintain high operating rates. We expect the high operating rates to support the coke and coking coal prices in February before real demand is tested after March.