China coal short-term outlook July 2024

In contrast to the hot July, the thermal coal markets have been mellow, with heavy precipitation and high imports curtailing the demand for spot coal. As a result, the Qinhuangdao coal prices fluctuated around RMB850/t throughout the month. The coal inventory at ports is sliding, which will underpin coal prices in August. However, the coming shoulder demand season will lead to a bearish market sentiment. Steel demand remained sluggish in July, and steel mills maintaining high operation rates faced declines in their margins. At the same time, the Third Plenum meetings did not provide any substantial policy support and rebar prices collapsed as supply flooded the market. Steel mills now face the difficult decision of whether to idle their blast furnaces in the face of poor profitability. How will the coking plants cope with declining coke demand, and what will their coal procurement strategy look like? How will prices develop? Read our report for more details.