China's domestic thermal coal market saw a moderate rise in trading activity, spurred by expected colder weather in the next few days, traders said, noting ample supply still a main drag on near-term prices.  

 

Some 5,500 Kcal/kg NAR thermal coal were sold at 965 yuan/t FOB with VAT at northern ports, according to an Inner Mongolia-based trader, who also reported a 0.8%-sulfur 5,000 Kcal/kg NAR cargo traded at 855 yuan/t.

 

However, buyers were outnumbered by sellers in the market, traders noted. This, coupled with buyers' persistently aggressive bidding, kept the upside in check.

 

"Cargo availability is abundant in the market. Even as utilities have the need to restock ahead of the year end, no people are scrambling to buy," said a Zhejiang-based trader. "Personally, I believe the prices would move sideways in the remaining days of the year."

 

A Shanghai-based trader, mainly engaging in deals with cement producers, said he had presold his high-CV cargoes to utilities in the wake of waned demand from cement plants. "Now, I only have some low-sulfur, low-ash 5,000 Kcal/kg NAR coal left, offering at 865 yuan/t," he said. The trader also held a bearish outlook about the January market.

 

On December 19, offers for 5,000 Kcal/kg NAR coal were generally centered in 855-860 yuan/t FOB, slightly lower than a day earlier.

 

"We received some sporadic demand with minor volumes, but the prices are suitable," said a Tianjin-based trader, who failed to sell a 0.6%-sulfur 5,000 Kcal/kg NAR cargo at 868 yuan/t yesterday and found the buying interest declined to 860-865 yuan/t today.

 

Yet he sold a 5,500 Kcal/kg NAR cargo at 960 yuan/t in today's afternoon, against selling interest of 965 yuan/t.

 

Another round of cold snap is around the corner. The National Meteorological Administration expected the cold air front to hit most parts of the country from west to east in December 21-24, which would plummet temperatures in regions along the middle and lower reaches of the Yangtze River.

 

Some areas in Jiangsu, Anhui, Henan and Shaanxi are forecast to see temperatures fall below zero for the first time of this year. Provinces in the northeast will experience heavy snows again, driving down the temperatures below negative 20 degrees Celsius.

 

Recent cold snaps have pushed up coal consumption at coastal power plants, giving hopes to higher demand in the next few days.

 

As of December 15, coastal power plants held 15.4 days' worth of stockpiles, compared with 17.2 days a week earlier.

 

However, some end users expected the frigid temperatures to be short-lived, noting temperatures may rise again in January, one of the key reasons that put their spot procurement on hold.

 

Coal stocks remained elevated at northern ports. As of December 18, Qinhuangdao port's coal stocks totaled 7.16 million tonnes, above 7 million tonnes for the eighth consecutive day. Stockpiles were at 13.42 million tonnes at Caofeidian on the same day, against 9.59 million tonnes a year earlier.

 

On December 18, the CCI index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was at 955 yuan/t FOB with VAT, a 2 yuan/t rise from a day ago; 5,000 Kcal/kg NAR coal at 854 yuan/t, unchanged, and that for 4,500 Kcal/kg NAR stood at 735 yuan/t, up 2 yuan/t.