China's portside thermal coal prices slightly bounced back after being stable for days, as participants factored in expectations of colder weather and tighter supply in key mining region.

 

On December 8, offer prices generally increased 5-10 yuan/t compared with a day earlier, with 5,500 Kcal/kg NAR at 935-945 yuan/t, 5,000 kcal/kg NAR at 825-840 yuan/t and 4,500 Kcal/kg NAR at 725-730 yuan/t, all on a FOB basis with VAT at northern China ports.

 

The market saw some offers at 840 yuan/t for low-sulfur 5,000 Kcal/kg NAR and 830 yuan/t for high-sulfur, a Zhejiang-based trader noted.

 

"Next week should see an uptick, although it remains to be seen how much the increase will be," he said. "There will be some utilities with pressing need to restock by then."

 

A widespread cold air activity is forecast to affect north and northeast China from this weekend, resulting in a temperature plummet of 10-20 degrees Celsius through next week, according to the National Meteorological Administration.

 

Most insiders agreed the market would pick up as two price rallies had happened in November after temperature declines.

 

A Fujian-based trader reported a deal of 840 yuan/t for Shanxi 5,000 Kcal/kg NAR cargoes.

 

For 5,500 Kcal/kg NAR grade, a few offers were seen at 945 yuan/t, rising 5 yuan/t from a day ago. A Guangdong-based trader appeared to buy a low-sulfur cargo at 943 yuan/t, although Sxcoal cannot immediately confirm it.

 

"Many traders hype up the weather factor, but only to find there are not many deals concluded," a Shandong-based trader said. "Apparently, the market may not go as far as they expect."

 

Traders noted some opencast mines in Inner Mongolia had suspended operations amid issues including land levy and safety checks. This, coupled with some others cutting production after completing or close to complete annual production targets, has tightened local supply.

 

A few coal miners in Ordos began to raise prices to test reactions of buyers, but most miners maintained their prices unchanged, awaiting more signals to emerge.

 

"The overall demand hasn't been strong enough and reckless price rally will subdue our sales," a local miner noted.

 

Prices in Shanxi and Shaanxi were also largely unchanged, although the bullish sentiment was brewing in the market.

 

On December 8, the CCI index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was at 936 yuan/t FOB with VAT, up 3 yuan/t from a day earlier; 5,000 Kcal/kg NAR coal at 827 yuan/t, a 4 yuan/t rise on a daily basis, and that for 4,500 Kcal/kg NAR stood at 717 yuan/t, a 2 yuan/t rise.