China coal short-term outlook June 2024

Summer has arrived, but the benchmark Qinhuangdao prices fell in June. Heavy rainstorms in southern China were responsible for the decline. Meanwhile, high seaborne imports curtailed demand for domestic spot coal. As a result, inventory levels at the northern loading ports rose steadily. In July, coal generation historically swings up, but this time, there are concerns that coal prices will trend upward due to increased demand. Steel mills continued to ramp up the operation rates of their blast furnaces, though steel prices are declining and steelmaking margins are deteriorating due to weak demand. We expect these conditions to persist in the short term as steel mills look to secure their cash flow before the production cut guidelines are enforced. Market participants are eagerly awaiting the outcome of the China Communist Party conference in July, which could set the tone for steel demand and eventually coking coal prices for the rest of 2024. Read our report for more details.