Huaneng says to strictly control spot purchases of domestic thermal coal

sxcoal.com Company,  Price 2020-07-08 11:40:10

China's state-owned power giant Huaneng Group said in a notice issued on July 7 that it will tighten the screw on spot purchases of domestic thermal coal, given the benchmark price has been rising rapidly to nearly 600 yuan/t at northern ports.


It said in the notice that while coal prices are rising at production areas and northern ports, the stock of the country's unified-dispatch power plants are growing steadily, which reached a new high of 136 million tonnes on July 5, up 1 million tonnes from end-June.


Not only coal supply should be ensured over the peak demand season in the summer, it is also necessary to prevent prices from moving up too quickly, the notice said.


For subsidiaries that have to build up inventories via spot purchases, it allowed them to buy spot coal if prices are quite low, but prohibited any purchases of high-priced cargoes.


It said almost all July-arrived spot cargoes were purchased with prices locked before the recent increases, but some winning bidders violated contracts by cutting down or refusing deliveries, or hyping up prices deliberately. "Relevant power plants should strictly deal with bidders' nonperformance by the book," the notice said.


While requiring reduction of spot purchases, it asked power plants to scale up the fulfillment rate of long-term contracts.


The group wants to send a signal that spot prices are increasing too wildly and need to be cooled down, which could probably prompt more power plants to follow the suit, some market players said.


"The higher the price stands after it crosses the 600-yuan/t mark, the higher the down risk could be," one Beijing-based trader said.


As of July 7, Fenwei CCI 5500 index have reached a year high of 597 yuan/t FOB, surging from the recent low of 469 yuan/t on April 30. The gauge has jumped 21 yuan/t since the beginning of July.


Huaneng Group invited tenders for a total 385,000 tonnes of thermal coal with calorific value from 3,000 Kcal/kg to 4,500 Kcal/kg on a NAR basis, with bidding expiring on July 9.



(Writing by Alex Guo  Editing by Jessie Jia)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China Jul thermal coal market: prices in reversed V shape 2020-08-07

Thermal coal prices rose in China in the first half of July backed by safety regulation and control on sales quota at mines, but headed south in the second half amid a slide in buying interest from we

2 China Jul coastal coal shipping market: freight rates up on demand 2020-08-07

China's coastal coal shipping market spiraled up in July, as some power plants maintained coal shipment from northern ports. Purchase was robust from power plants in Guangdong and Fujian

3 Chinese coking coal market still silent amid weak supply-demand fundamentals 2020-08-07

China's coking coal market extended the silence on August 7 citing abundant supply, poor demand and high stocks at both supply and demand sides. Coking coal stocks at mines surveyed by sx

4 China Coal Daily Track (Aug 7) 2020-08-07

Thermal coal Production area Coal delivery in Shaanxi province improved after the rain tapered off. Demand, especially for lumps, fared better, with some mines lifting prices by 5-20 yuan/t

5 Typhoon drives up thermal coal vessel freight despite waning demand 2020-08-07

Typhoon Hagupit, the fourth typhoon of this year, has brought heavy downpours and disrupted coal handling at Chinese ports, driving up shipping rates of thermal coal vessels, although downstream deman

6 Indonesian thermal coal outlook dims as tepid demand persists 2020-08-07

Outlook for Indonesian thermal coal market was clouded by persisting tepid demand from major importing countries, and recent deep output cuts are less likely to create a strong jolt in the short run.

7 Weekly China coal market news summary (Aug 3-Aug 7) 2020-08-07

China's Jul coal imports slump 20.63% on yr China's coal imports slumped 20.63% in July compared with the same month last year, as strict import restrictions continued to weigh ... &nbs

8 Weekly global coal market news summary (Aug 3-Aug 7) 2020-08-07

Global coal-fired power plants size first decreases in H1 The size of coal-fired power generation utilities decreased for the first time on record in the first half of 2020, with the closed

9 China's Jul natural gas imports fall 11.8% on mth, customs 2020-08-07

China imported 7.35 million tonnes of natural gas in July, falling 0.99 million or 11.8% from the preceding year, showed data from the General Administration of Customs on August 7. The i

10 China's Jul coal imports slump 20.63% on yr 2020-08-07

China's coal imports slumped 20.63% in July compared with the same month last year, as strict import restrictions continued to weigh down Chinese buying appetites, despite a large price advantage of o

Most Read Articles

1 Glencore H1 coal production rises 15% amid COVID-19 woes 2020-08-03

Glencore said in a report on July 31 that its coal production declined 15% year on year to 58.10 million tonnes in the first half of this year, mainly due to some operations' suspension in Colombia am

2 China's 90 large coal miners H1 output up 0.3% 2020-08-03

Raw coal output from China's 90 large miners climbed 0.3% from a year ago to 1.3 billion tonnes during January-June, official data showed. Operating revenue (including non-coal businesses

3 Australian thermal coal price logs a 27% yearly drop despite similar demand shrink 2020-08-04

Australian high-ash thermal coal price was subject to a nearly 27% year-on-year decline, although the price was also in a 20-day downside starting from July 24 last year due to similar demand shrink,

4 Bayan Resources H1 coal output falls nearly 25% 2020-08-05

Bayan Resources, one major coal producer in Indonesia, registered a year-on-year slump of 24.4% in coal output to 12.1 million tonnes in the first half year. Its coal sales decreased 3.9%

5 China's domestic thermal coal market moving sideways with downward bias 2020-08-03

This week started with a quiet session for the spot thermal coal market at northern Chinese transfer ports, the same picture like other days last week, as demand remained lackluster and supply kept gr

6 Tepidness continues in China coking coal market 2020-08-03

Tepidness was still seen in China's coking coal market, and prices of the steel-making material remained under downward pressure. Last week 12 mines monitored by sxcoal.com cut coking coa

7 Mongolian year-to-date coal exports plunge 46.4% on COVID-19, customs 2020-08-04

The year-to-date coal export from Mongolia totaled 11.26 million tonnes as of August 2, marking a year-on-year slump of 46.4%, according to Mongolian website IKON on August 3, citing Mongolian customs

8 Indonesia Aug coal HBA price hits fresh low 2020-08-06

The Indonesian government set its coal benchmark price (HBA) for August at $50.34/t, notching the lowest since January 2009, the Energy and Mineral Resources Ministry said in a statement on August 5.

9 Indonesian thermal coal loses strength in Chinese market, driving market shift 2020-08-03

Indonesian low-calorific value thermal coal, usually popular among Chinese buyers for blending in power generation, lost strength again in Chinese market after a fortnight of uptick. This

10 China's H1 coal railway shipments down 6.8% on yr 2020-08-04

Coal shipments through the railway network across China totaled 1.12 billion tonnes in the first six months this year, down 6.8% from the same period in 2019, data from the National Development and Re