It is reported that coal price in China rebounded sharply when the negotiation between power and coal enterprises hasn"t ended yet. Insiders said that reduction and restriction in production have mainly driven the supply down, but market would run more balanced in 2009.
Qinhuangdao coal price picks up from the H2 of December in 2008 with 6000kcal per kilogram premium blend coal price increased from CNY 580 per tonnes to CNY 600 per tonnes on December 15th to CNY 630 per tonnes to CNY 650 per tonnes on January 5th. In the same period, 5500kcal per kilogram gained 17% from CNY 500 per tonnes to CNY 520 per tonnes to CNY 590 per tonnes to CNY 610 per tonnes.
Meanwhile, coal stock at Qinhuangdao Port slid abruptly. Data shows that 5.236 million tonnes of coal was piled at Qinhuangdao on January 3rd with 4.677 million tonnes for domestic trade, sharply diminishing from 8.63 million tonnes on December 7th with 7.99 million tonnes for domestic trade.
Pushed by chilling weather in the north area, the consumption of coal rolled up 15% MoM in power plants in December, 2008, which also enlarged purchase for the New Year Day, Spring Festival and Spring Move.
Analyst from Ping An Securities said that coal consumption that still declined 13% YoY in last December indicated a soft demand from electrical enterprises. High stock would put pressure on the price of thermal coal after the Spring Festival. Besides, lacking supply also resulted in the price leap, as coal miners have strengthened reduction in output and arranged a complete overhaul which has sharply cut the production.
Data from National Bureau of Statistics shows that the yield of raw material in 2008 November reached 227 million tonnes, up 5.2% YoY but down 9% from the average increase of 14.2% in January to November. It reflects the regulation in small sized mines and limitation in middle and large sized mines.