Commodity Market Report
China coal short-term outlook July 2019: supply recovery pulls down prices
Report summary
A variety of negative forces piled pressure on thermal coal prices in July. Prices for Qinhuangdao 5,500 had dropped by RMB16/t to RMB600/t at the end of the month. Constrained thermal coal demand amid cooler weather and higher rainfall as well as improved domestic supply combined to force prices down. Improved supply will outpace recovered demand in August, which will continue to push prices down. We expect the Qinhuangdao 5,500 price to fall to RMB580/t by the end of August. Prices for metallurgical coal types dropped at a faster pace by RMB 30-100/t in July as weak restocking sentiment restrained demand amid slim coke profits. Towards the end of the month, coking coal prices rebounded as coke prices recovered after restrictions were relaxed slightly on blast furnaces in the key steelmaking city of Tangshan. We think improved demand and reduced coking coal supply will push prices higher in August, with the price for Liulin #4 increasing by RMB20/t to RMB1,600/t.
Table of contents
- Executive Summary:
- Domestic supply surge drives down summer prices
- Metallurgical coal market retreats before rebounding towards the end of July
- China’s economy has slowed substantially, but should be stable in H2
- Weather drives thermal coal demand in the summer
- Metallurgical coal demand improved on the back of improving coke profits towards the end of July
- Shaanxi’s output showed first year-on-year growth in June
- National output hits record high of 333.4 Mt
Tables and charts
This report includes 12 images and tables including:
- Key Market Data
- China domestic monthly supply between 2018 and 2019
- Key thermal coal prices: history and forecast, US$/t
- Hard coking coal price arbitrage at Tangshan steel mill, US$/t nominal
- Monthly coal-fired power generation (TWh)
- Monthly hydro-power generation (TWh)
- Monthly throughput at Qinhuangdao port, Mt
- Monthly throughput at Huanghua port, Mt
- Monthly hot metal production (Mt)
- Monthly metallurgical coke production (Mt)
- Thermal coal supply, Mt
- Metallurgical coal supply, Mt
What's included
This report contains:
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