China’s top coal producer Shenhua and China coal may give more discounts on its high-sulphur coal in July, after reducing prices by 10-20 yuan/t, sources have said.<br /> <br /> Rumors said that Shenhua may also raise the penalty standard on sulphur content from 0.8% to 0.6% in its third-quarter contracts, with 2 yuan/t penalty for every 0.1% increment.<br /> <br /> Meanwhile, China Coal is said to raise the penalty standard on sulphur content to 0.6%, with 2 yuan/t penalty for every 0.1% increment, which means a discount of at least 8 yuan/t, as most of its coal products have sulphur content above 1.0%.<br /> <br /> If applied, China Coal may see its 5,500 Kcal/kg NAR coal -- with sulphur above 1.3% -- drop another 14 yuan/t to 496 yuan/t with VAT, FOB Qinhuangdao.<br /> <br /> The impact on Shenhua would be less significant, as the group’s high-sulphur coal output is not so high, sources said.<br /> <br /> Both however, are yet to be confirmed. Several utilities said they had not received such a notice, but considered it a sensible choice to boost sales under the current sluggish market.<br /> <br /> A Jiangsu-based utility staff said massive price cuts and discounts may still not help much, as the crux of the matter is rather poor demand as utilities are well stocked but power demand remains flat.<br /> <br /> <p> The latest Fenwei/Platts CCI1 index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port fell to 500.00 yuan/t FOB, inclusive of VAT, on July 1, down 8.00 yuan/t from the previous week. </p> <p style="text-align:center;"> <img src="/upfiles/news/image/20140707/20140707172311_5242.jpg" alt="" /> </p>