Commodity Market Report
China coal short-term outlook September 2022
Report summary
The QHD price increased to RMB1500/t in September as the market tightened due to hot weather, rainstorms, the Covid-19 pandemic and weak hydrogeneration, among other factors. China reported 370 Mt of coal output in August. Again, the daily output dropped below 12 Mt. We expect low production to continue in September and October as safety is the crucial issue limiting supply. In the meantime, maintenance activities on the Daqin rail line will worsen coal inventories at ports. As such, the QHD price will continue to go up. The steady resumption of steel mills brought extra steel output but became a burden on steel destocking and harmed the price. The steel mills and coking plants’ poor margin positions generated a new wave of production suspensions in October, similar to July. But we don’t expect the coking coal price to collapse drastically. Why is this?
Table of contents
- Thermal demand: heatwaves boosted coal generation in August
- Met demand: steel production increase undermined demand recovery
- Domestic production fell for two consecutive months
- We foresee a high likelihood of sliding coal supply in September and October
- The national coal reserve increased 28.1% year on year to 207.9 Bt
- Thermal imports: Russian exports to China are increasing
- Met imports: higher volume from Mongolia expected
- Thermal price: safety issues curtailed coal output which led to gradual price increase
- Thermal outlook: cheaper Russian coal to slow growth of QHD price
- Met price: disappointing September was not entirely unforeseen
Tables and charts
This report includes 13 images and tables including:
- BF capacity utilisation rate of 247 steel mills
- Mine inventory
- 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)
What's included
This report contains:
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