Mon, January 29, 2018 7:56 am

Seaborne Thermal Coal Commentary: In China, four of the country’s top utilities have told the government some regions will face heating and electricity shortages due to tightening supplies of coal ahead of the Lunar New Year, the latest sign the nation’s winter heating crisis may deepen. The situation in China is expected to help provide support to international thermal prices and if coal supplies are unable to rise to a reasonable level within the country in the next weeks, difficulties in dealing with the low temperatures (see details below) will be multiplied by higher handling fees and lower inventory levels which will raise global thermal coal prices. The API 2 prompt month index finished the week down $0.15 to $92.50/MT, the API 4 was $0.40 lower to $98.15/MT and the NEWC index was up $2.60 to $108.60/MT.

Low Temperatures Prompt Blue Alert at China’s Northern Ports: Plummeting temperatures in China prompted the Country’s State Oceanic Administration (SOA) to issue a blue alert, issued when ice extends over 60 nautical miles from the shoreline, on Friday for sea ice in a northern key port area which has the possibility of disrupting commodity shipments. According to the agency, ice in the Liaodong Bay extends 67 nautical miles from the shoreline and ice also extends 18 nautical miles out in the northern part of the Yellow Sea. The SOA said that over the weekend they expect that icy conditions in Bohai Bay and the northern Yellow Sea will develop significantly with warnings of colder weather and big waves farther south near Hainan island, the Taiwan Strait, and the coasts of Fujian and Zhejiang.