Typhoon Maysak, the latest in a series of storms to affect China in August, is expected to disrupt coal logistics along the country's coastline and curtail coal consumption. But the impact could be short-lived as the typhoon is not forecast to make landfall in China as it moves north along the East China Sea.
Maysak comes after typhoons Higos, Bavi, Mekkhala and Hagupit hit China in recent weeks in an unusually stormy month along the Chinese coastline. Maysak, which is currently near Taiwan's east coast, could affect south China's coastal waters as early as tonight, the country's meteorological administration warned. It is expected to make landfall in South Korea by 3 September.
Recent typhoons have disrupted China's coal handling ports by pushing up coastal freight rates for coal vessels. The freight rate for a 50,000-60,000t vessel operating from north China's main coal transshipment port of Qinhuangdao to south China's Guangzhou port was 39.30 yuan/t ($5.73/t) on 27 August compared with Yn35.90/t on 6 August.
Coastal freight rates could rise in the coming days, although a recent downturn in spot coal purchases by coastal utilities because of increased hydropower output following the typhoon-linked rain and high coal stocks could curb any such effect.
Coal consumption data of five of the six main coastal utilities are no longer available. But Zhejiang Power's daily coal burn as of yesterday dropped to 131,000 t/d, its lowest since 12 August, as the country transits into cooler autumn temperatures. The utility's stocks as of yesterday should last it for at least 34 days. Some coastal utilities may prefer to draw down on high inventories before winter restocking starts, which typically occurs in October.
China's hydropower output reached 146.3TWh in July, 6.1pc up from a year earlier and 20.4pc higher than June, according to data from coal industry association the CCTD. The country's thermal power output for July was 460TWh, a fall of 0.7pc from the same month last year. August data are not available yet, but the high rainfall brought by recent typhoons could potentially continue to sustain hydropower output and curb coal consumption.
Argus last assessed NAR 5,500 kcal/kg coal at Yn554.17/t fob Qinhuangdao on 28 August, down by Yn1.50/t from the previous week. The price in US dollar terms was $80.44/t fob Qinhuangdao, edging up by 3¢/t over the same period as the Chinese yuan strengthened against the US dollar.
