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China coal short-term outlook July 2022

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04 August 2022

China coal short-term outlook July 2022

Report summary

China’s market faced significant issues in July, including record high temperatures vs the lowest quarterly GDP growth rate since Q1 2020 when the coronavirus pandemic started. The QHD price remained at above RMB1,200/t for the first three weeks of the month and then fell to below RMB1,200/t. We expect the market to maintain this downward trend in the near term. Steel mills suspended operations in July with the aim of cutting supply and supporting the price. Coke and coking coal prices dropped drastically in response. This tactic began to work during the last week of July, when the steel price finally gained strength and margins widened. At the same time, some steel mills started talking about resuming their BFs and buying interest for coking coal emerged. What does this mean for coking coal markets in August?

Table of contents

  • Thermal: coal generation dropped 6% in June year-on-year even with record high temperatures
  • Met: more BFs move into overhaul to finally limit met coal consumption
  • Domestic supply stayed strong in H1 2022 with daily output of 12.1 Mt ahead of NDRC’s target of 12 Mt
  • Despite expectations of intensified safety inspections, we believe coal supply will remain solid
  • Coal capacity pipelines update
  • Thermal imports: seaborne thermal coal imports in 2022 should be 64 Mt lower than last year
  • Met imports: Russia and Mongolia leading
  • Thermal: QHD price started to fall end of July as summer demand recedes
  • Met: price weakness in line with demand shrinkage

Tables and charts

This report includes 15 images and tables including:

  • BF capacity utilisation rates (%)
  • Rebar prices in Hangzhou (RMB/t)
  • 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)
  • China coal output monthly (Mt)
  • Top five productive province in June
  • Thermal coal supply (Mt)
  • Metallurgical coal supply (Mt)
  • Coal inventory in the mines (Mt)
  • Key thermal coal prices: history and forecast (US$/t)
  • Hard coking coal price arbitrage at Tangshan steel mill (US$/t nominal)

What's included

This report contains:

  • Document

    China coal short-term outlook July 2022.xlsx

    XLSX 407.22 KB

  • Document

    China coal short-term outlook July 2022

    PDF 1.26 MB