Commodity Market Report

China coal short-term outlook November 2018: import quota drives prices

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The decline in thermal coal prices was reversed in mid-November after the Chinese government decided to restrict coal imports for the rest of 2018. However, we don’t expect prices will continue on an upward momentum all the way to the new year. Read this month’s short-term outlook to understand the factors that will keep prices in check despite the squeeze on imports. Stronger-than-expected demand and constrained domestic supply pushed the Liulin #4 metallurgical coal price up by RMB 120/t in November. But after China’s winter heating season officially started in the middle of the month, steel and coke plants are now subject to output restrictions. In this report, we look at how these production curtailments will affect metallurgical coal demand for the rest of the year.

Table of contents

  • Import policy drives price up, but rise won’t last
  • NDRC wants to stablise coal prices through 2019 annual long-term contract mechanism
  • Metallurgical coal prices strengthened further on constrained supply
  • Warmer winter limits growth of thermal coal demand
  • Winter cuts have started but implementation still weaker than 2017
  • Domestic output remained flat in October

Tables and charts

This report includes 10 images and tables including:

  • Key thermal coal prices - history and forecast, US$/t nominal
  • Hard coking coal price arbitrage at Tangshan steel mill, US$/t nominal
  • Monthly coal-fired generation, TWh
  • Monthly throughput at Qinhuangdao, Mt
  • Monthly hydropower generation, TWh
  • Monthly throughput at Huanghua, 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

    China coal short-term outlook November 2018: import quota drives prices

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