China Coal Monthly
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Coal Ch ina Coal Monthly The definitive monthly publication on the Chinese coal industry January 2020 | Issue 192 Thermal coal market in China IHS McCloskey/Xinhua Infolink Chinese markers Steam coal 06-Dec 13-Dec 20-Dec 27-Dec steadies ahead of Lunar New Year QHD FOB markers ($/t) Supply and demand in China's thermal coal market 5,000kc NAR 69.65 69.54 69.46 69.89 shrank ahead of the Lunar New Year holiday between or 4,700kc NAR 65.47 65.37 65.29 65.69 24-31 January, though most small mines will suspend 5,500kc NAR 78.11 78.07 77.95 78.51 or 5,800kc NAR 84.96 84.74 84.43 85.06 operations through mid-January to mid-February. or 6,000kc NAR 87.89 87.67 87.35 87.99 Spot cargo trades eased significantly at loading ports, South China CFR markers ($/t) and transactions were estimated at RMB561/t ($81.54/t) 4,700kc NAR 55.86 56.44 56.47 56.10 FOB Qinhuangdao (QHD), basis 5,500 kc NAR, on 21 5,500kc NAR 64.19 64.41 63.96 63.85 January, unchanged since 13 January, after rising from 6,000kc NAR 77.42 77.92 77.95 77.90 RMB548/t ($79.65/t) FOB on 19 December. Note: FOB prices inclusive of domestic taxes The rate for 5,000 kc NAR cargoes was RMB502/t Note: CFR prices exclusive of Chinese taxes Source: IHS McCloskey/Xinhua Infolink © 2020 IHS Markit ($72.97/t) FOB, also steady for more than a week, following a rebound from RMB485/t ($70.49/t) FOB Metallurgical coal and coke markers on 19 December. Coking coal prices (RMB/t) 16-Dec 23-Dec 30-Dec 06-Jan Price rises in mining regions came to a halt, having in Shanxi, Gujiao FOR1* 1,295 1,295 1,295 1,360 rallied since China tightened safety controls in in Hebei, Tangshan CIF2* 1,585 1,585 1,585 1,585 November. Small mines in Shaanxi largely suspended Coke prices (RMB/t) 16-Dec 23-Dec 30-Dec 06-Jan work from 12 January, and in Shanxi and Inner in Shanxi, Jiexiu4 1,650 1,650 1,700 1,700 3 Mongolia, small mines began their Lunar New Year in Hebei, Tangshan 1,850 1,850 1,900 1,900 holiday on 20 January. * inclusive of domestic taxes 1: ash <8%, volatiles 16~22%, sulphur 1.3% This has had limited impact, as demand from local 2: ash <10%, volatiles 23~25%, sulphur<1% and small industrial users also weakened, after they 3: ash ≤13%, volatiles ≤1.2%, sulphur≤0.75% had completed stocking for the holiday. Large mines, 4: ash ≤13, sulphur≤0.75, volatiles≤1.2 which are focused on supply under term contracts, Source: IHS Markit/Xinhua Infolink © 2020 IHS Markit have mostly planned for a one-week holiday. Sentiment in consuming regions was largely Power generation (billion kWh) steady as well. Ex-stock prices at Guangzhou were 2019 2018 % change RMB625/t ($90.84/t), basis 5,500 kc NAR, on 21 Hydro power 1,153 1,106 4% Coal-fired power 5,117 4,913 4% Coal imports (000t) Other 815 702 16% Nov. Nov. % Jan-Nov Jan-Nov % Total 7,085 6,720 5% 2019 2018 change 2019 2018 change Source: IHS Markit/Xinhua Infolink © 2020 IHS Markit Steam coal 5,265 4,607 14% 79,398 72,740 9% Coking coal 6,204 5,334 16% 72,994 60,944 20% Coal stocks (mt) Anthracite 478 882 -46% 7,138 8,737 -18% Dec. 2019 Dec. 2018 Change Brown coal 6,686 6,050 11% 102,562 91,664 12% Power plants 81.55 81.41 0.14 Other coal 2,436 2,860 -15% 35,417 35,859 -1% Producer 91.58 79.5 12.08 Total 21,068 19,733 7% 297,511 269,944 10% Total 173.13 160.91 12.22 Source: IHS Markit/Xinhua Infolink © 2020 IHS Markit Source: IHS Markit/Xinhua Infolink © 2020 IHS Markit Confidential. © 2020 IHS Markit®. All rights reserved. IHS Markit | China Coal Monthly Contacts Contents John Howland, Publisher & Managing Editor [email protected], +44 (0) 7580 751119 Thermal coal market in China steadies Yu Ge, Editor ahead of Lunar New Year 1 [email protected] China’s imports up 6% in 2019, strong Q1 expected 4 Wang Haibin, Data Content Manager China’s coal output up 4% in 2019 5 hbwang@[email protected] Met coal prices in China edge up in January 6 Scott Dendy, Asian Business Development Manager Coal shipments in China down 1% last year 7 [email protected], + 65 97219006 Power output and demand growth All editorial enquiries rates in China slip in 2019 8 +86(0) 10 8479 7036/37/38 Steel market in China cools in January 9 Sam Shoro, Product Manager [email protected] GDP growth in China slows to 6.1% in 2019 10 Sales EMEA January, unchanged since 7 January, and transactions Tel: +44 (0) 1344 328155 at Ningbo were RMB545/t ($79.22/t), same basis, flat [email protected] for more than a week. APAC Tel: +65 6439 6000 [email protected] February supply appears tight Americas Lower supply is expected to persist in early February, Tel: +65 6439 6000 when China returns from holiday and industrial US/Canada Toll-free: +1 888 645 3282 output picks up, but most small mines will remain [email protected] closed, some market sources say. Subscriptions It is also likely that this scenario could last into mid- Tel: +44 (0) 1344 328 300, [email protected] March, with a spate of accidents having forced China Design and layout to toughen safety measures since November. David Maragh However, the mass mine closures seen in Shaanxi Tel: +44 (0) 203 253 2129, [email protected] since early 2019 appear unlikely, according to Editorial address Room 610, Tower A, Pacific Century analysts, who believe the domestic market will see Place, No.2, Gongtibei Road, slight strains before mid-March, when the National Chaoyang District, Congress meeting concludes. Beijing, China, 100027 Power plants and industrial facilities are expected to Tel: +86(0) 10 6539 3746/3475 enter the market to replenish stocks in early February, Fax: +86(0) 10 6539 3016 which could lead to a certain degree of shortage in Published monthly consuming regions, with domestic availability having Published by slipped since December. Xinhua InfoLink Development Co. Ltd. This has brought about a slide in stocks at power in association with plants, with inventories at coastal units at 14.80 mt IHS Global Limited, on 20 January, down from the recent peak of 16.17 mt Willoughby Road, on 28 December. Stocks at major power plants across Bracknell, Berkshire, RG12 8FB, UK. China were just 75.28 mt or 15 days on 12 January, Tel: +44 (0) 1344 328000 slipping from 83.21 mt on 29 December. Websites Stocks at loading ports were sliding as well, with https://ihsmarkit.com/products/energy-coal-news-analysis.html www.xinhuainfolink.com tonnages at Qinhuangdao (QHD) at 4.34 mt on 21 January, down from 5.55 mt in early January. Stocks at Huanghua decreased to 1.63 mt on 20 January, down from 1.84 mt on 16 January. In consuming regions, tonnages at Guangzhou dropped to 2.40 mt on 20 January, compared with the recent high of 3.23 mt on 20 December. Stocks Confidential. © 2020 IHS Markit®. All rights reserved. 2 January 2020 IHS Markit | China Coal Monthly at Ningbo fell to 4.76 mt on 16 January, down from FOB prices at Qinhuangdao ($/t) 4.94 mt a week earlier and 5.20 mt a month earlier. Several suppliers expect mild price hikes to continue 105 in February, which has also prompted some traders to increase stocks in recent weeks. 95 Weakness seen in longer term China’s coal demand is expected to decline in mid- 85 March, when north China stops heating supply. However, the tightening of safety controls is also 75 likely to be relaxed by then, following the conclusion of the National Congress. 65 April-June is traditionally a period of low demand for the domestic market, when seasonal coal demand is 5,000 kc NAR 5,500 kc NAR 5,800 kc NAR usually low. By late June, demand will climb when air- Source: IHS Markit © 2020 IHS Markit conditioning usage starts in northern regions. Stocks at Qinhuangdao (mt) Shanxi FOR prices for 5,500 kc NAR material (RMB/t) 7.5 7.0 470 6.5 450 6.0 5.5 430 5.0 4.5 410 4.0 2020 2019 Source: IHS Markit © 2020 IHS Markit Source: IHS Markit © 2020 IHS Markit However, production in the second quarter is Price of 5,500 kc NAR coal at Guangzhou (RMB/t) forecast to be at least equal to the November- December average of 11 mt/d. 740 Domestic production is forecast at around 3.90 bnt 720 this year, up 4% from last year, and imports are expected to be capped at last year’s level of 300 mt. 700 Demand is projected at 4.00 bnt, up just 1% from 2019. 680 This results in surplus of 200 mt, according to analysts. Some of the lowest price points could be seen in 660 the second quarter, pessimistic market watchers said, expecting levels could hit as low as RMB500/t 640 ($72.67/t) FOB, basis 5,500 kc NAR, if smooth imports 620 arrivals continue.