China coal short-term outlook March 2022
The government has introduced measures to ease the market tightness, including signing 100% of gencos’ demand with long-term contracts (excluding import volumes) and checking contract fulfilment rates, along with plans to increase domestic supply to guarantee daily output of 12.6 Mt. However, these approaches haven’t had an immediate effect and the QHD price lingered around RMB1,500/t in March. The resurgence in Covid cases nationwide interrupted the rapid recovery in steel production and coking coal demand. The domestic coking price declined accordingly after hitting RMB3,410/t in mid-March. Lockdowns have dragged down steel demand, and road transport disruption has broken the coal supply chain. We expect the conditions to improve by late April and once demand re-awakens, prices will also start to rise again. Please read the report to find more.