China coal prices poised to rebound
China’s domestic coal prices are expected to surge past 2023 highs this year, Reuters reported on Wednesday, citing the China Coal Transportation and Distribution Association (CCTD).
This forecast comes despite anticipated flat coal output and a decline in demand from key sectors, as per the statement.
Han Lei, General Manager of CCTD’s research department, pointed to low stockpiles as a key driver of the predicted price increase. “If market purchases increase, that will directly cause prices to rise,” he explained.
Current thermal coal prices exceeding 800 yuan ($110.41) per metric ton are viewed by the industry as the price floor for 2024.
The CCTD expects flat coal production in 2024 compared to last year’s growth. This limited output, coupled with potential economic stimulus boosting demand, is seen as a recipe for price hikes. However, coal demand has been uneven across sectors.
Disruptions in the Red Sea have inflated freight costs, making imported coal more expensive.
Costs for Indonesian and Australian imports have risen by $1 and $3 per ton, respectively, according to Han. Despite the price increase, China’s coal imports, the world’s largest, are expected to remain flat or even decline in 2024.
