China coal short-term outlook October 2020: stronger demand expected Report

Commodity Market Report 02 November 2020

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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

Macroeconomic indicators suggest China’s economy continued to expand in Q3, but thermal and metallurgical coal prices are benefiting differently. While supply remained constrained in October, the QHD 5,500 price failed to rise further due to weaker thermal coal demand in the coastal region and robust hydro generation growth. We expect both domestic supply and demand to strengthen in November, bringing the price somewhere between RMB585/t and RMB620/t. Meanwhile, strong steel demand improved coking margins and translated into stronger metallurgical coal demand. Drawing down of inventory at mines has triggered a price uptick in metallurgical coal and we expect the trend to continue in November. Read our report for more details.

Weak demand in the coastal region prevents QHD price rise
Domestic coking coal price recovers quickly after inventory falls
China GDP increases 4.9% year-on-year in Q3
Hydro generation increased 23% year-on-year in September
October high steel demand will last and support coal demand in November
Output raised marginally in September
Inner Mongolia supply returns

Tables and charts

This report includes the following images and tables:

Key thermal coal prices: history and forecast (US$/t)
Hard coking coal price arbitrage at Tangshan steel mill (US$/t nominal)
Monthly coal-fired power generation (TWh)

Monthly hydro-power generation (TWh)
Monthly throughput at Qinhuangdao port (Mt)
Monthly throughput at Huanghua port (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:

Coal markets - China short-term outlook data - Oct 2020.xlsx

XLSX 437.22 KB
China coal short-term outlook October 2020: stronger demand expected

PDF 909.11 KB