China's top coal mining group China Energy Investment Corporation, or CHN Energy, adjusted up its monthly contract thermal coal prices for June shipments sharply, sources disclosed.
CHN Energy, a conglomerate merged from miner Shenhua Group and state utility China Huadian Group in November 2017, pegged the June contract price at 537 yuan/t FOB northern port for 5,500 Kcal/kg NAR coal, rising 67 yuan/t compared with a month ago, sources said.
It also priced 5,000 kcal/kg NAR coal at 488 yuan/t FOB, a jump of 86 yuan/t month on month.
However, the new pricing was within market expectations, and may have limited impact on the current market trend and sentiment.
On June 4, the most-traded futures for September delivery on Zhengzhou Commodity Exchange closed the afternoon market at 517.6 yuan/t, a 1.22% fall from last session.
On the spot market, domestic 5,500 Kcal/kg NAR coal was offered at 543-549 yuan/t FOB, and 5,000 Kcal/kg NAR coal was offered at 485-489 yuan/t.
Just slightly lower than offer prices of spot coal, CHN Energy's monthly contract prices seemed not competitive enough, traders pointed out.
"The contract prices are very close to the spot prices this time; it's hard to help steer spot market direction," said a trader based in Tianjin. "Anyway, those taking in a 'wait-and-see' approach may start taking positions."
China's domestic spot market began edging down entering June after a short-lived stabilization. Spot prices started to bottom out in mid-May after falling for more than two months, with 5,500 Kcal/kg NAR coal rising by nearly 80 yuan/t by late May.
(Writing by Alex Guo Editing by Harry Huo)
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