Chinese coal traders, as well as medium- and small-sized coal-fired utilities are scrambling to lock in short-term purchases, according to trading sources in a Reuters report. The hunt for spot market purchases is fueled by concerns on market tightness when downstream customers resume their operation after the extended Lunar New Year holiday.
Coal demand is likely to pick up when factories such as chemical plants and cement makers return to work after the holiday. However, there are worries that recovery in coal production cannot keep up with the pace of increasing demand from downstream users.
A senior NDRC official said that 57.8% of coal mines had resumed production. He noted that the authorities would prioritize to prevent virus outbreak at the mines, but they would also work to deal with a lack of workers to transport disruption.
The benchmark prices of thermal coal with an energy content of 5,500 kcal/kg in China rose to a four-month high of CNY 576/ton ($82.56) on Tuesday.
