A derailment on China's coal-transporting Daqin rail line has disrupted deliveries to Qinhuangdao port in north China, which could temporarily reduce supplies to coastal utilities.
The derailment occurred yesterday near Xiazhuang station, which is 323km from Datong and close to Beijing, market participants told Argus. The derailment has disrupted operations with it unclear how long they will last.
The 653km Daqin, which runs from Datong in the key coal-producing Shanxi province to Qinhuangdao, shipped 1.22mn t/d during 1-11 August, according to coal industry association CCTD, down from an average of 1.3mn t/d in July.
Daqin's disruption could provide support to fob port prices of domestic coal. Stocks at Qinhuangdao hit 6.05mn t on 10 August, the highest since 25 April, before falling to 5.72mn t yesterday. The derailment could possibly further reduce coal supplies at the port.
Scheduled maintenance for Daqin is also due to begin in September. This could again curb supplies at a time when customs restrictions are curtailing imports.
Chinese domestic coal prices have held relatively steady this week. Bids for NAR 5,500 kcal/kg coal were around 550-554 yuan/t fob ports in north China, while offers for the grade were around Yn556-560/t fob. This compares with Argus' latest assessment of Yn554.40/t fob Qinhuangdao on 14 August.
