The ongoing power crunch in parts of China could further tighten the supply of coking coal if the country prioritizes thermal coal supply and delivery, market sources said.
China prioritizes thermal coal
China's National Development and Reform Committee (NDRC) has stressed the need to guarantee thermal coal supplies to tackle the ongoing power shortage in areas such as Liaoning and Guangdong provinces.
Delivered volumes of domestic coking coal in the fourth quarter could decrease further if NDRC prioritizes thermal coal, and coking coal prices could continue to follow the upticks expected in thermal coal prices, market sources said.
The most-traded January coking coal futures contract closed at 3,290.50 yuan ($510) per tonne on Thursday September 30, up by 278.50 yuan per tonne day on day, reflecting improved sentiment on coking coal prices.
Major coal miners in Changzhi city, Shanxi province, increased truck-delivery coking coal prices by 60-180 yuan ($9-28) per tonne the same day, saying that they were under pressure to ensure thermal coal delivery to several provinces.
Coking coal prices increased by around...