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China coal short-term outlook March 2018: supply recovery and weaker demand drive 'reasonable' prices

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04 April 2018

China coal short-term outlook March 2018: supply recovery and weaker demand drive 'reasonable' prices

Report summary

In March, thermal and metallurgical coal prices fell 13% and 3% month-on-month, respectively. The largest driver of the price drop was improving supply. But with the heating season over and residential power usage dropping, the growth rate in coal production will be moderate in Q2. As such, we will see prices come down further, albeit at a slower rate, to within the range the governments deems reasonable.

Table of contents

  • Executive summary
    • Price to return to 'reasonable' range
    • Sluggish demand underpins premium hard coking coal price uptick
      • Key thermal coal prices – history and forecast, US$/t nominal
      • Hard coking coal price arbitrage at Tangshan steel mill, US$/t nominal
    • Thermal coal enters weak demand season
    • Household fuel switching will continue in the near term
    • Extended production restrictions dampen metallurgical coal demand
    • Relaxed government scrutiny buoys resumption of coal production
    • Falling coal prices push China to reconsider restrictions

Tables and charts

This report includes 11 images and tables including:

  • Key market data
  • Monthly coal-fired generation, TWh
  • Monthly hydropower generation, TWh
  • Demand: Image 3
  • Demand: Image 4
  • Monthly hot metal production, Mt
  • Monthly metallurgical coke production, Mt
  • Thermal coal supply, Mt
  • Metallurgical coal supply, Mt
  • Prices: Image 1
  • Prices: Image 2

What's included

This report contains:

  • Document

    cms china short term market report data.xls

    XLS 2.33 MB

  • Document

    China coal short-term outlook March 2018: supply recovery and weaker demand drive 'reasonable' prices

    PDF 397.49 KB

  • Document

    China coal short-term outlook March 2018: supply recovery and weaker demand drive 'reasonable' prices

    ZIP 1.80 MB

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