Sustained volume momentum: Daqin Railway’s coal throughput growthremained robust at 44.1% YoY in Jul-17, though moderating from 49.0% in Jun-17.Sequentially, the 36.3mt throughput represented 1.7% MoM increase from35.8mt in Jun-17. In the first seven months of 2017, Daqin’s coal volumes haverebounded 34.7% YoY, a reversal from the -23.8% YoY weakness in the sameperiod of 2016.
Volume growth normalized: As expected, Daqin Railway’s coal throughputgrowth further normalized to 11.5% YoY in October 2017from a highercomparison base, down from 25.8% YoY in September 2017. Sequentially, the37.36mt volume remained largely flat vs. 37.39mt in September 2017, partlyhelped by a postponed maintenance period (October 25–November 15, 2017) vs.2016(October 9–28, 2016).
Further demand recovery: The robust volume growth was driven by continueddemand recovery, as the average coal price in Jul-17reached Rmb597.2/ton(+42.6% YoY and +4.9% MoM). Meanwhile, coal inventory at Qinhuangdaosurged 96.8% YoY to 5.415mt, up 2.2% MoM from 5.3mt in Jun-17.
In the first ten months of 2017, Daqin’s aggregate coal volumes rebounded30.6% YoY, vs. -17.8% weakness in the same period of 2016.
Demand remained robust: Daqin’s normalizing coal throughput growth inOctober 2017was partly led by a higher volume base in October 2016, as thenegative demand growth reversed to 12.5% YoY.Average coal prices in October 2017still improved 1.3% YoY and 0.7% MoM, toRmb620.0/ton. Coal inventory at Qinhuangdao increased significantly at 60%YoY, to 6.89mt (+18% MoM).