Due to shortage of supplies, price increases have been seen in the international coal market. The price of thermal coal price at Newcastle Port, Australia has increased to $108/mt, up $8-9/mt on last week. At the same time, thermal coal prices in the South African and European markets have also increased, with current respective quotations of $98.67/mt and $88.46/mt.
An insider in the Chinese market has revealed that China and Japan have set their thermal coal contract prices for 2010 at $115.5/mt, marking an increase of 47 percent over $78.5/mt last year.
The source stated, "Although the contract volume between China and Japan is not confirmed, it is expected to be equal to last year's volume." Influenced by the rapid recovery of Chinese domestic demand, the coal export volume from China to Japan in 2009 was 6.4 million mt, a massive decrease over 2008.
With the increases in the international coal market and decreasing port inventory in China, along with the limited increase in domestic coal supplies, the domestic coal price in China may move upward.
The export prices for major coal categories at Qinhuangdao port have increased by RMB 5-10/mt ($0.733-1.466/mt); with the export price of Datong quality mix coal with thermal power above 6000 kCal/kg is RMB 745-755/mt ($109.24-$110.70/mt).
Inventories at Qinhuangdao port and Guotou Jingtang port have decreased massively. On April 27, coal inventory at Qinhuangdao was 4.83 million mt, down 40 percent on the peak of the last few months. On April 25, inventory at Guotou Jingtang port was 1.27 million mt, the lowest volume since February this year.