Coal news and updates

China’s domestic coal prices soften amid NDRC’s stable price guidance

China’s domestic coal prices edged lower after a guidance by top economic body National Development Reform Commission, or NDRC, which stated that domestic coal prices will be considered stable below Yuan 900/mt [$141.59] at ports, sources told S&P Global Platts Feb. 11.

Sources said major coal producers in China are being asked to sell the fuel below the market price now. Prices of Qinhuangdao 5,500 kcal/kg NAR were heard at Yuan 1,120/mt FOB [$176.08] Feb. 11 against Yuan 1,135/mt FOB heard Feb. 9, according to sources. The price of 5,000 kcal/kg NAR was heard at Yuan 995/mt FOB against Yuan 1,005/mt FOB heard Feb. 9.

Meanwhile, Chinese traders expect demand for Indonesian coal to weaken if the guidance by NDRC is followed, sources said. “It will affect Indonesian coal buying interest first if Chinese domestic coal prices fall below Yuan 900/mt,” a Chinese trader said.

However, the challenge is to lift domestic production to maintain sufficient stockpiles at power plants and stability in prices, sources said.

“Given the 20% coal price rally YTD (year-to-date), we think the Chinese government will likely enforce ‘supply boost’ + ‘price control’ as a combined measure to cool down coal prices from the current elevated level,” a note by Morgan Stanley on Feb. 10 said.