SteelOrbis Shanghai
After experiencing a slump in the month of November, coal prices at Qinhuangdao Port finally halted their decrease movement on December 1, though trading activity levels continued to be sluggish. By the end of November, the FOBT prices of Datong premium blend coal with heating value of 6,000 kCal/kg were in the range of RMB 680-700/mt, while those of Shanxi premium blend coal (5,500 kCal/kg) stood at RMB 570-590/mt, both equal to the levels of the previous week.
The halt in the declining movement of coal prices was mainly due to the improvement in the supply and demand equilibrium at Qinhuangdao Port. With a reduction observed in "panic" sell-offs, Qinhuangdao Port has registered an obvious drop in new arrivals in recent days.
Moreover, coal inventory at Qinhuangdao Port has also recorded a certain decline. According to the statistics, compared with the mid-November level of 9.2 million mt, the total coal inventory at Qinhuangdao Port on November 30 was down to 8.452 million mt or so. Against the deterioration of the overall economic situation, consumption of energy resources such as coal is also on a downward trend. During the period from November 1 to November 28, daily coal shipments at Qinhuangdao Port fell 18.5 percent compared with October levels.
Many market players express the view that China's coal prices may temporarily move on a stable trend. However, in the long run, the market is expected to be characterized by oversupply of coal.