Coal demand continues to go down amid the macro economic downtrend, though coal demand is supposed to rise in the winter season. The winter peak season doesn't demonstrate itself this year. On the opposite, the price of coal, thermal coal in particular, has seen dropping at even a higher rate.
Coking coal price has seen the sharpest decline On the side of thermal coal, on November 10th 2008 at Qinhuangdao port, Datongs 6,000 calorie high quality mixed coal stood at CNY 870 per tonnes, decreasing by CNY 30 per tonnes. Since November, it has declined by an aggregate of CNY 70 per tonnes, or 7.4%. Thermal coal price in local areas has also pointed to the downside. On November 10th 2008 in Shanxi's Datong area, thermal coal stayed at CNY 540 per tonnes, stumbling CNY 30 per tonnes, or 5.3% from that of late October, and plunging CNY 80 per tonnes, or 12.9% compared with the highest level of CNY 620 per tonnes in August.
It was affected by the on-going downtrend of iron and steel manufacturers; coking coal price is still declining following the previous weeks, but with a smaller range. On the side of chemical oriented coal, on November 10th in Yuangquan area, medium anthracite lump stood at CNY 1,000 per tonnes, roughly the same as it was in October, and declining by CNY 200 per tonnes, or 16.7% compared with the historical peak in August.
Among the three varieties, coking coal has seen the sharpest price decline. The reasons are: A large amount of coking coal is supplied by small and medium sized coal mines, so the price is based on much speculation. Downstream iron and steel manufacturers have declined by a large extent. On November 7th 2008, steel composite price index by Mysteel remained at 131, dipping 17.9% compared with last year. Owing to the price limit in June and July, and the prop of coal consuming season in winter, thermal coal price went down later than coking coal. The benefit is enjoyed by Cement and steel manufacturers as the coal and coking coal accounts for 18-22% of net revenues. This helps to maintain the reduction profitability to little extent. But the major loser here are Coal exporters i.e. Sesa Goa.
Coking coal price has seen the sharpest decline On the side of thermal coal, on November 10th 2008 at Qinhuangdao port, Datongs 6,000 calorie high quality mixed coal stood at CNY 870 per tonnes, decreasing by CNY 30 per tonnes. Since November, it has declined by an aggregate of CNY 70 per tonnes, or 7.4%. Thermal coal price in local areas has also pointed to the downside. On November 10th 2008 in Shanxi's Datong area, thermal coal stayed at CNY 540 per tonnes, stumbling CNY 30 per tonnes, or 5.3% from that of late October, and plunging CNY 80 per tonnes, or 12.9% compared with the highest level of CNY 620 per tonnes in August.
It was affected by the on-going downtrend of iron and steel manufacturers; coking coal price is still declining following the previous weeks, but with a smaller range. On the side of chemical oriented coal, on November 10th in Yuangquan area, medium anthracite lump stood at CNY 1,000 per tonnes, roughly the same as it was in October, and declining by CNY 200 per tonnes, or 16.7% compared with the historical peak in August.
Among the three varieties, coking coal has seen the sharpest price decline. The reasons are: A large amount of coking coal is supplied by small and medium sized coal mines, so the price is based on much speculation. Downstream iron and steel manufacturers have declined by a large extent. On November 7th 2008, steel composite price index by Mysteel remained at 131, dipping 17.9% compared with last year. Owing to the price limit in June and July, and the prop of coal consuming season in winter, thermal coal price went down later than coking coal. The benefit is enjoyed by Cement and steel manufacturers as the coal and coking coal accounts for 18-22% of net revenues. This helps to maintain the reduction profitability to little extent. But the major loser here are Coal exporters i.e. Sesa Goa.
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