Coal news and updates

Inner Mongolia coal market may benefit from rail freight cut

Thermal coal market of Inner Mongolia may get support from the latest freight cut by the Hohhot railway bureau, sources said.

From November 5 to the end of the year, railways under the Hohhot bureau will be allowed to lower freight rates by 15-30% for coal shipment of more than 15,000 tonnes from Dongsheng area of Inner Mongolia to Jinan, Shandong and Shanghai, citing a document recent released by the China Railway Corp.

Industry insiders said the freight cut would help cut transport cost by 30 yuan/t for coal transported to Zhangjiakou in Hebei province, and 60 yuan/t to Shandong province, traders said.

Sales pressure of thermal slacks facing Inner Mongolian miners may be alleviated, as this product was mainly transported by railways.

The demand for slacks remained roughly stable last week, mainly due to large miners’ stable pricing at ports. The mine-month prices of 4,500 Kcal/kg NAR, 5,000 Kcal/kg NAR and 5,500 Kcal/kg NAR slacks were offered at 85 yuan/t, 95-120 yuan/t and 120-140 yuan/t, VAT included, respectively.

Demand of Inner Mongolian lumps rebounded from late September, due to increased restocking activities for the winter heating season and large-scale closure of local mines. The mine-month price of 6,000 Kcal/kg NAR lump was 265-300 yuan/t with VAT, sources said.

Sources said the road freight, which was 20 yuan/t lower than the railway freight from Inner Mongolia to Tianjin at present, may also be impacted by the cut to rail freight.

Market sources said the CRC also notified railway bureaus of Beijing and Shandong to reduce freight rates, starting from November 4.

But freight rates of Daqin rail line, the country’s top coal dedicated railway, would not be adjusted for now, sources confirmed.

source: http://en.sxcoal.com