China's Shenhua stops selling spot domestic coal for July: sources

Singapore — Chinese coal miner Shenhua has temporarily stopped offering cargoes in the spot market, citing a supply shortage, sources said July 2, citing a company notification to buyers.

Strong demand for Chinese coal and Shenhua's obligation to supply under long-term contracts were cited as reasons for the supply tightness, the sources said, adding the move has boosted Chinese domestic coal prices.

Followed the announcement, no offers for spot cargoes of Chinese coal were heard from Shenhua, traders in China said.

"Demand for Chinese coal is too good, hence ports are congested," a Singapore-based trader said.

A shortage of ships in northern China meant Qinhuangdao port stocks rose despite improved demand, sources said.

"Most recently, even Chinese domestic coal supply is short as buyers compete for coal, driving up Chinese domestic coal prices," a south China-based trader said.

Chinese domestic coal offer prices for 5,500 kcal/kg NAR grade inched up to Yuan 578-Yuan 583/mt FOB Qinhuangdao [$81.8-$82.5/mt] July 2, up Yuan 5/mt day on day.

Meanwhile, a south China-based trader said a large proportion of Chinese domestic coal were fixed on a medium- to long-term basis between Chinese miners and utilities, meaning the impact on market prices could be moderate.