Coal price supported by peak demand season

Coal price was expected last week to pullback, but it turned out that the price drop was limited. In some regions, coal price corrected down before rebounding. In Shaanxi and Inner Mongolia, the price of coal for chemical plants rebounded above 1,000yuan/mt delivered. The price rise was a correction from previous weak expectation.

Though China domestic coal supply has achieved double digit growth in the first half of 2022, coal supply still remains tight. The hot weather in China comes earlier this year, and the temperature in some regions hits new high compared to the same period of past years, and thus demand for electric power surges. In early Jul, some companies in Zhejiang, Jiangsu and Anhui received notice of power rationing. Daily coal consumption has currently approached the high point in past years, and thus coal price is unlikely to move lower in the short term, supportive to methanol market