China thermal coal price stable despite sea ice and int’l price hike

Jan 28, 2011

China's benchmark thermal coal price remained stable during January 19 to January 25 despite of the turbulence of sea ice and international price hike.
According to statistics released by Ocean Shipping Coal, China's benchmark thermal coal price averaged 774 yuan/tonne, up only one yuan from previous week. China's coal price remains in a downward trend which began since Dec 8 of 2010.
By January 16, the free on board (FOB) price for power coal at New Castle Port in Australia has jumped 4.9% on week to US$1 36.3/tonne, and that of coking coal up 5.7% to US$280/tonne.
Bohai has been covered by ice, which is supposed to block coal imports of China and further push up domestic coal price.
However, the international coal price hike and the bad weather seemed to pose little impact in China's domestic coal price.
The stability in coal price in China despite of international price hike is mainly attributed to smooth throughput at major ports in north China, which has effectively guaranteed stable coal supply to south China.

Experts forecast that coal supply and demand in coastal market will maintain flourish until the Chinese Spring Festival in February, and power plants would have stable coal supply if the weather will not deteriorate into a substantial hinder to disrupt coal transportation from northern coal producing provinces to major coal consumers in the south.

But considering the approaching of Chinese Spring Festival on February 3, China may have to face mounting transportation in railways, which may affect coal transportation. Therefore, insiders predicted that China's coal price is very likely to maintain at high level and grow up further in February. (sourced:Xinhua)