China's domestic thermal coal market showed little movement during a thinly-traded session, although snowy weather sustained and affected production in some producing regions.

 

On December 14, cargoes of 5,500 Kcal/kg NAR thermal coal were generally offered at 965-975 yuan/t FOB with VAT, unchanged from a day earlier, and those of 5,000 Kcal/kg and 4,500 Kcal/kg NAR grades were also quoted stable at 850-860 yuan/t and 720-740 yuan/t, respectively.

 

Traders reported limited trading activity at northern ports, with only a handful of deals observed. A 5,500 Kcal/kg NAR cargo was said to have traded at 960 yuan/t, while a Shandong-based trader sold 10,000 tonnes of this grade at 968 yuan/t.

 

Some traders said the snow at northern ports subdued market trading activities, noting the bad weather would slow down handling operations in the next few days.

 

Sellers appeared to have accelerated sales, evidenced by more offers emerging in the market, but buying interest remained lukewarm.

 

"The market is in a deadlock. Prices may dip slightly but not significantly without firm buying interest picking up," said a trader based in Tangshan.

 

Some offers for 5,000 Kcal/kg NAR have fallen below 850 yuan/t FOB, but traders noted difficulties in making deals even at a price of 846 yuan/t. Trades for this grade were scarcely heard.

 

For 4,500 Kcal/kg NAR grade, some Shanxi coal with 0.8% sulfur was quoted at 740 yuan/t, which could be negotiated as "deals have faced difficulties to conclude at this level since yesterday", according to a Qinhuangdao-based trader.

 

"We didn't expect this round of rallies is so short-lived especially as the ongoing snow is affecting coal production," a Shanxi-based trader noted.

 

Sxcoal learned from miners that the pithead market was largely unchanged, but an increase up to 20 yuan/t was seen in northern Shanxi, where heavy snowfall disrupted production at some mines and truck transport.

 

The snow has resulted in suspension at most opencast mines and some underground ones in Inner Mongolia, local sources confirmed. Road transport was also disrupted, resulting in few deals concluded.

 

"The snow is hard to melt on the road as the temperatures would stay at an extremely low level in the week to come," said a local miner.

 

The snow is forecast to hit many places in the north in the next two days, the National Meteorological Administration said.

 

In South China, the weather remained comfortable, with temperatures at around 20 degrees Celsius in Shanghai today (December 14). But the NMA said the temperature would plummet starting from tomorrow, which may spur coal consumption for heating purpose.  

 

At coastal power plants, their daily coal arrivals declined quickly in the past week while consumption was rising, leading to stockpiles falling notably. As of December 11, their stockpiles could sustain coal burns for 16.3 days on average, compared with 16.8 days a week ago.

 

The market may go up next week as coal consumption is expected to increase further due to the temperature plummet.

 

On December 14, the CCI index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was at 951 yuan/t FOB with VAT; 5,000 Kcal/kg NAR coal at 850 yuan/t and that for 4,500 Kcal/kg NAR stood at 730 yuan/t, all unchanged from the previous day.