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China coal short-term outlook June 2019: QHD price rise likely as strong power generation expected

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05 July 2019

China coal short-term outlook June 2019: QHD price rise likely as strong power generation expected

Report summary

China’s thermal coal prices were held steady by opposing forces in June – low inventories at northern loading ports pushed prices up while weak demand in the coastal region pulled them back down. However, the struggle was broken by a coal mine accident in Shanxi province on 20 June, leading to a supply-driven increase taking the QHD 5,500 price to RMB 616/t. We expect the price to keep increasing to RMB 630/t in July – although this time driven by demand. We also expect coal generation will be up 5.5% in July year-on-year. Prices for metallurgical coal types dropped by RMB 30-80/t in June as weak restocking sentiment restrained demand. We think the price will keep falling in July as Tangshan has started to restrict steel plant operations to avoid air pollution. We expect the price for Liulin #4 to drop by RMB40/t to RMB1,610/t in July.

Table of contents

  • Prices increased following mine accidents in June and will increase further in July due to hotter temperatures
  • Metallurgical coal market starts to lose steam amid softening demand
  • Coal generation won’t be restrained by strong hydro generation in July
  • Metallurgical coal demand softens on the back of narrowing steel profits
  • China approves 130 Mtpa of production capacity in H1 2019
  • Coal output hits 312 Mt in May
  • Downside risk associated with safety concerns

Tables and charts

This report includes 10 images and tables including:

  • 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:

  • Document

    cms_china_short_term_market_report_data.xls

    XLS 2.50 MB

  • Document

    China coal short-term outlook June 2019: QHD price rise likely as strong power generation expected

    PDF 902.11 KB

  • Document

    China coal short-term outlook June 2019: QHD price rise likely as strong power generation expected

    ZIP 2.30 MB

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