China's portside thermal coal prices remained unchanged on the whole, as the potential downward correction due to sluggish demand was balanced out by high costs of newly-arrived shipments from production areas.  

On May 18, benchmark 5,500 Kcal/kg NAR coal was offered at 980-990 yuan/t FOB with VAT at northern ports, and prevailing offers for 5,000 Kcal/kg and 4,500 Kcal/kg NAR grades stood at 860-880 yuan/t and 760-780 yuan/t, respectively, all flat from a day earlier.

Trading activity remained patchy and focused on 5,000 Kcal/kg NAR grade. A Shanxi 5,000 Kcal/kg NAR cargo changed hands at 870 yuan/t FOB.

Several traders reported a growing number of traders wanted to sell before the end of this month as "the more close to the month's end shipments are delivered, the lower prices could be".

Some end-May cargoes of 5,500 Kcal/kg NAR coal were offered around 965 yuan/t and 855-860 yuan/t for 5,000 Kcal/kg NAR coal. This could be related to the self-ignition at ports as the temperature is growing.

Not only coal stockpiles hover high at northern ports, some utility sources disclosed their warehouses have been almost saturated, leaving no space for new discharges. "Daily coal burn remains week at many power plants in the south," one source noted.

Some of utilities in Guangdong province just called their suppliers to cut shipments as vessels are struggling to be discharged.

Meanwhile, cement producers purchased at times, yet not strong enough to drive the price, traders reported.

However, the market didn't fall because of low demand, as the cost still stood high. A Hebei-based trader reported the present cost of shipping 5,500 Kcal/kg NAR coal from Shanxi to northern ports was at 1,005 yuan/t, although no buying interest was received even he set the selling price at 970-980 yuan/t.

The high cost came as the majority of coal mines maintained their prices unchanged and some even raised prices moderately, citing sound sales to local end users and tightened supply in Shaanxi and Inner Mongolia.

Looking ahead, many traders predicted a round of decline in June, but it is hard to tell how much the decline will be.

On May 18, domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed by Sxcoal at 971 yuan/t FOB with VAT, down 4 yuan/t from a day ago, 5,000 Kcal/kg NAR assessment was stable at 864 yuan/t, and that for 4,500 Kcal/kg NAR stood at 752 yuan/t, a 3 yuan/t drop.