Commodity market report

China coal short-term outlook May 2017: weak demand drives 'reasonable' prices

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Report summary

The price of FOB QHD 5500 was down to RMB557/t at the end of May – placing it within the range that doesn't require government intervention. Gencos are fulfilling their long-term contracts, and with strong seaborne imports, buying spot coal is a last resort. It's this weak demand that has pushed prices down and we expect they could fall further in June. Weakening demand and improving supply are behind the decline in metallurgical coal prices – FOR Liulin #4 HCC fell slightly to RMB1,340/t in May. Decent profit margins are spurring coal producers to operate at full tilt, but another round of strict environmental inspections at coke and steel producers across the north of China is suppressing output and the subsequent demand for coking coal.

What's included

This report contains

  • Document

    cms china short term market report data.xls

    XLS 2.18 MB

  • Document

    China coal short-term outlook May 2017: weak demand drives 'reasonable' prices

    PDF 390.44 KB

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    China coal short-term outlook May 2017: weak demand drives 'reasonable' prices

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Table of contents

    • Key market data
    • Demand for thermal coal slides to low in Q2
    • Tightening monetary policy will pressure coal demand
    • Belt and Road will increase coal demand within the related regions mid-term
    • Stringent environmental inspections curbing demand for metallurgical coal
    • High production sustained in major producing areas
    • China plans to cut thermal coal imports

Tables and charts

This report includes 9 images and tables including:

Images

  • Monthly coal-fired generation, TWh
  • Monthly hydropower generation, TWh
  • Monthly throughput at Qinhuangdao, Mt
  • Monthly throughput at Huanghua, Mt
  • Monthly hot metal production, Mt
  • Monthly metallurgical coke production, Mt
  • Prices: Image 1
  • Prices: Image 2

Tables

  • Executive summary: Table 1

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