Stockpiles of Mongolian coal at the Ganqimaodu land port in North China’s Inner Mongolia, the largest gateway for Mongolian coal exports to China, remain at high levels despite the recent recovery of buying demand among Chinese users, Mysteel has found.
For example, as of January 17 there were approximately 2.31 million tonnes of Mongolian coal – mostly coking coal – stocked at the China Customs stockyard in Ganqimaodu, Mysteel’s survey results showed. The volume, higher by a substantial 7.39% compared with a month earlier, indicated that the accumulation of inventories since early December last year is showing no clear signs of waning, Mysteel Global noted.
The rise in coal stocks resulted mainly from the significant increase in Mongolian coal deliveries into Ganqimaodu, compared with coal dispatches to Chinese end-users scattered across China, Mysteel Global noted.
Over January 8-14, Mongolian coal inflows to Ganqimaodu had jumped by 14.45% on week to reach 800,000 tonnes while by contrast, coal outflows dropped by 12.01% on week to only 652,000 tonnes, the survey results showed.
Market sources said that beginning last week, some trading houses at Ganqimaodu have been transferring part of their coal stocks at the border crossing to some domestic coal wash plants but that the persistently high imports kept pushing the stock levels up.
Mongolian coal truck traffic to the Ganqimaodu border crossing averaged 1,114 units/day over January 1-17, increasing by 105 units/d from the same period last month or higher by 10.41%, Mysteel’s tracking data showed.
The sizzling buying demand for Mongolian coal among Chinese traders came after Chinese coke makers and steel mills began actively inquiring for the raw material, sources said. The coking firms and steelmakers are eager to build up their coal stocks in the event of a possible supply contraction and slow logistics during China’s Spring Festival holidays over February 10-17, they said.
Beginning Monday, coal wash plants in Xiaoyi and Jiexiu in North China’s Shanxi province have shown strong interest in purchasing Mongolian coking coal, a keenness that has apparently boosted coal transactions and warmed the trading sentiment in the market, said several sources based at Ganqimaodu land port.
The upbeat sentiment among Ganqimaodu-based traders encouraged them to lift their offering prices for Mongolian coking coal by Yuan 50-70/tonne ($7.0-9.7/t) on January 17, Mysteel learned.
As a result, on the same day the price of Mongolian 5# raw coal (ash<20%, VM<28%, sulfur<0.8%, GRI>80) under Mysteel’s assessment rose to Yuan 1,560/t on ex-warehouse basis at Ganqimaodu and with VAT included, marking another on-week Yuan 10/t gain.
However, Mongolian coal truck congestion on route to Ganqimaodu, together with the high stocks at the port, will likely limit the scope for any increase in Mongolian coking coal prices in the short run, an industry insider warned.
Under these circumstances, prior to the Spring Festival the price of Mongolian 5# raw coal may reach a peak at Yuan 1,600-1,630/t ex-warehouse basis at Ganqimaodu with VAT included, Mysteel predicted.
