China Shenhua Group, the largest coal company in China, has announced that it decreased its year-long contract price for 5,500 kcal/kg thermal coal by RMB 21/mt ($3.1/mt) to RMB 558/mt ($82.1/mt) and has decreased its monthly contract price for 5,500 kcal/kg thermal coal by RMB 60/mt ($8.8/mt) to RMB 570/mt ($83.8/mt). These are the largest declines in coal prices announced by the company in the current year.
According to the data from China’s National Bureau of Statistics (NBS), in the January-April period this year the coal output of China’s large-scale coal producers amounted to 1.108 billion mt coal, up 2.5 percent year on year, with coal output in April amounting to 295 million mt, rising by 9.9 percent year on year.
Analysts have commented that coal supply in China is sufficient due to increases in coal output, while demand from downstream users is slack, which will likely contribute to further declines in coal prices.