China Reality Research Coal CLSA Asia-Pacific Markets Qinhuangdao spot prices

Average daily coal shipments from Qinhuangdao were 668,000 tonnes between March 27 and April 2, up 4% WoW and 3% higher than the average during 1H08.
On average, 6,009 wagons arrived daily at the port between March 27 and April 2, down 15% WoW and 34% on 1H08.
Port inventory fell 15% WoW to 4.6m tonnes.
Having been flat for four weeks, spot prices of higher-quality coal (5,800kcal/kg and 5,500kcal/kg) rose slightly, up 1.4% WoW and 0.4% WoW, respectively. Meanwhile, inferior coal (5,000kcal/kg) continued rising, up 2.1% WoW.
According to traders we talk to in the port, inventory pressure among the big suppliers is easing and, as a result, they are planning price hikes. For example, in April Shenhua (1088 HK) is asking for Rmb10/t more for 5,500kcal/kg coal, and China Coal (1898 HK) will increase its selling price by Rmb5/t. Datong Group is expected to follow suit soon.

Domestic media today are reporting that the government has stepped in to help settle the 2009 price negotiations; settlement has been elusive up till now due to the sharp
divergence between producers and IPPs. The president of Huaneng (902 HK) has told the media that his company’s bottom line is that the new price should not exceed last
year’s price. However, CRR expects that the recent increase in prices at the port is likely to strengthen the coal producers’ hand in the negotiations.