Tue, Oct04, 2011
It is reported that after dropping for about two months, thermal coal price along China coastal areas had rebounded since late August, thanks mainly to active buying from end users. And the price is likely gain further strength for the following supportive factors.
1. Supply from coal-rich Shanxi province is predicted to be affected by the deadly accident on September 16 at a mine in Shuozhou which belongs to China National Coal Group. The provincial government ordered all underground mines of China Coal in Shanxi to stop production before passing the inspection. From sources available to CCR and our own data base and we believe that the impact to supply which will be primarily thermal coal is about 6 million tonnes to 8 million tonnes.
2. Daqin, China top coal dedicated rail line would kick off a 12 day maintenance starting from Sep 20, causing a direct impact on coal delivery to northern ports. Inbound coal transport to Qinhuangdao is estimated to drop by 100,000 tonnes each day during the maintenance period. Given by that, coal stocks at port may follow a downward track if the outbound shipment remains high.
3. Coal inventories at ports have fallen even before the maintenance starts. Despite efforts made by relevant departments to increase rail supply, coal stockpiled at northern ports has been on the decrease since the beginning of Sep due to high shipment amid active buying from downstream sectors. Data showed, Qinhuangdao held 7.07 million tonnes of coal in stock as of September 19 down 230,000 tonnes from month beginning. When the maintenance starts, ports would likely see a swift fall in coal stocks as shipment is expected to keep high for a while.
4. Total demand for coal may remain robust as backed by high production in most energy-guzzling sectors. In addition, China PMI increased by 0.2% from one month before to 50.9% for August the first rise in four months indicating a stable economic performance for the time being. Under this scenario, coal demand in China is expected to stay strong in the near term.
5. Hydro conditions have not yet improved notably in the southwest. Therefore, thermal power generation still faces huge pressure to make up the shortfall in electricity supply.
6. Coal imports by China may be somewhat impacted by the recent rise in global coal price. Thermal coal prices at Australia Newcastle port a benchmark for Asian coal prices rose for four straight weeks in the period from August 12 to September 9 jumping USD 4.58 per tonne or 3.82%.
Given by that, some coal demand may turn to seek domestic sources.
(sourced from sxcoal)
It is reported that after dropping for about two months, thermal coal price along China coastal areas had rebounded since late August, thanks mainly to active buying from end users. And the price is likely gain further strength for the following supportive factors.
1. Supply from coal-rich Shanxi province is predicted to be affected by the deadly accident on September 16 at a mine in Shuozhou which belongs to China National Coal Group. The provincial government ordered all underground mines of China Coal in Shanxi to stop production before passing the inspection. From sources available to CCR and our own data base and we believe that the impact to supply which will be primarily thermal coal is about 6 million tonnes to 8 million tonnes.
2. Daqin, China top coal dedicated rail line would kick off a 12 day maintenance starting from Sep 20, causing a direct impact on coal delivery to northern ports. Inbound coal transport to Qinhuangdao is estimated to drop by 100,000 tonnes each day during the maintenance period. Given by that, coal stocks at port may follow a downward track if the outbound shipment remains high.
3. Coal inventories at ports have fallen even before the maintenance starts. Despite efforts made by relevant departments to increase rail supply, coal stockpiled at northern ports has been on the decrease since the beginning of Sep due to high shipment amid active buying from downstream sectors. Data showed, Qinhuangdao held 7.07 million tonnes of coal in stock as of September 19 down 230,000 tonnes from month beginning. When the maintenance starts, ports would likely see a swift fall in coal stocks as shipment is expected to keep high for a while.
4. Total demand for coal may remain robust as backed by high production in most energy-guzzling sectors. In addition, China PMI increased by 0.2% from one month before to 50.9% for August the first rise in four months indicating a stable economic performance for the time being. Under this scenario, coal demand in China is expected to stay strong in the near term.
5. Hydro conditions have not yet improved notably in the southwest. Therefore, thermal power generation still faces huge pressure to make up the shortfall in electricity supply.
6. Coal imports by China may be somewhat impacted by the recent rise in global coal price. Thermal coal prices at Australia Newcastle port a benchmark for Asian coal prices rose for four straight weeks in the period from August 12 to September 9 jumping USD 4.58 per tonne or 3.82%.
Given by that, some coal demand may turn to seek domestic sources.
(sourced from sxcoal)
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