Name: China coal short-term outlook October 2022
Brand: Wood Mackenzie
SKU: 147716
Price: 5000 USD
Availability: OnlineOnly
Author: Wood Mackenzie

Commodity Market Report 03 November 2022

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Report summary

Disruptions to the Daqin rail line was a major driver for the thermal coal market in October. Firstly, daily shipments along the line dropped to 1 Mt during the maintenance period from 28 September to 22 October. Secondly, the line reportedly transported only 0.7 Mt on 14 October, caused by a local coronavirus outbreak. Finally, the Daqin rail firm announced a one-week extension of its maintenance programme, to 29 October. These issues together pushed the QHD price up to RMB1,638/t on 25 October. Any market confidence on the positive signs given by the Chinese Party Committee Congress soon waned. Demand continued to be low and bearish sentiment prevails for the coming winter. Margin conditions for steel making dropped to the low point seen in July, and the steel mills slowly suspended their BFs. What does that mean for coking coal demand and prices?

Thermal demand: slumping hydrogeneration underpins coal generation
Met demand: recovery proved to be overrated - again
Daily output in September achieved a YTD recorded high of 12.89 Mt/d
Production in fourth quarter is expected to maintain momentum
Thermal imports: Russian 5,500 coal becomes cheaper than Newcastle 5,500 in Asia since October
Metallurgical imports: volumes from Russia and Mongolia continued to grow
Thermal price: the coronavirus outbreak of Daqin rail line pushed up the QHD price
Thermal outlook: issues will push the QHD price upward
Met price: unreal price increase defeated by a weak reality

Tables and charts

This report includes the following images and tables:

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)China coal output monthly (Mt)Thermal coal supply (Mt)Metallurgical coal supply (Mt)Key thermal coal prices: history and forecast (US$/t)Hard coking coal price arbitrage at Tangshan steel mill (US$/t nominal)