China coal supply and demand growth both slows down recently

Oct 08, 2023

China coal supply and demand growth both slows down recently, and the price corrects. On supply front, due to accidents at major production areas, some coal mines were shut for inspection. As a result, coal production was capped and supply reduced.

Meanwhile, demand for coal weakened as well, as the high temperature weather subsides while rainfalls increased. Consumption of coal at thermal power plants decreased seasonally. In addition, the increasing rainfalls led to improvement in hydropower generation, also resulted in reduced demand for coal consumption. Traders at coastal regions were under immense pressure with trading volume decreasing. Firstly, coal imports were less competitive and cargo arrivals reduced. Secondly, traders were concerned that coal price drop could extend from interior regions to coastal regions.

As for methanol, with little change in fundamentals, the market largely tracked the movement of commodity market. Ningxia Baofeng's new 1.15 million mt/yr MTO plant has been under trial run since Aug 17, while the support to methanol market has been digested.

Weak fundamentals and high port inventories continue to exert pressure on the MEG market
China's imports of major commodities, including coal, crude oil and natural gas

Recent Posts