China's domestic thermal coal prices continued a slight increase for the second trading day, reversing a previous decline since late February, driven by higher demand from traders to fulfill deliveries to end users.

 

On April 16, cargoes of 5,500 Kcal/kg NAR thermal coal were offered at 820-830 yuan/t FOB with VAT at northern ports, a 5 yuan/t rise from a day earlier; 5,000 Kcal/kg NAR coal was quoted also 5 yuan/t higher at 720-730 yuan/t. Cargoes of 4,500 Kcal/kg NAR grade were offered at 620-630 yuan/t, rising 5 yuan/t from the day prior.

 

The nearing delivery dates prompted traders to hasten purchases from the spot market, with some expressing urgency as their vessels are close to arriving at ports.

 

Traders indicated that buyers were willing to accept prices up to 720 yuan/t for 5,000 Kcal/kg NAR coal, against some higher offers of 740-745 yuan/t for 0.6-0.8% sulfur cargoes of this grade.

 

"Except for those who need to buy immediately, few buyers are willing to accept high prices," said a Jiangsu-based trader. "Not many high-priced deals are heard concluded. If sales continue to be weak in the next few days, the sentiment will likely change again."

 

For 5,500 Kcal/kg NAR grade, some offers were placed as high as 840-845 yuan/t, but buyers were only willing to accept 825 yuan/t or below.

 

"The market is now in a pricing battle between buyers and sellers," remarked a trader from Tianjin. "The prices may go down again in one or two days."

 

Many industry insiders shared a similar view, expressing skepticism about the sustainability of the current demand, and highlighting relaxed supply-demand fundamentals that support a downward price trend.

 

Coal stocks at Qinhuangdao ports are hovering around 5.0 million tonnes for a week. Despite a slight fall starting from April 1 due to Daqin maintenance, the stocks are still ample.

 

Coal inventories at Guangzhou port was 3.09 million tonnes on the same day, up straightly from 2.85 million tonnes over the same period, close to a historical high of 3.4 in May 2023.

 

Currently, coal inventories at coastal utilities are enough for around 18 days of use.

 

Alongside the upswing in the market, utilities raised price threshold for buying seaborne imported coal. Latest tenders were awarded at 524.5-534 yuan/t (CFR with VAT), about 5-10 yuan/t than the previous week, for Indonesian 3,800 Kcal/kg NAR coal with May laycans.

 

On April 16, 5,500 Kcal/kg NAR thermal coal traded at Qinhuangdao port was assessed at 823 yuan/t FOB with VAT, the 5,000 Kcal/kg NAR grade was at 727 yuan/t, and the 4,500 Kcal/kg NAR grade was at 634 yuan/t, all up by 6 yuan/t from a day ago.