Thermal coal trading activities at transshipment ports in northern China have been curbed by a persistent bid-ask price spread and low inquiries from power plants with ample coal stockpiles.

Sellers generally held firm prices, especially for low-sulfur coals, while buyers remained selective, only meeting pockets of demand, Sxcoal learned from multiple sources.

"Offers for 5,000 Kcal/kg NAR coal with 0.5% sulfur remained around 765 yuan/t FOB with VAT, but several downstream buyers aggressively sought to lower prices to 750 yuan/t," said one Qinhuangdao-based seller source.

The source remained hesitant to compromise on price, even though the recent heavy rains at Qinhuangdao port have made coal sales even harder due to increased moisture.

Similar hard bargains were reported by a Zhejiang-based trader source. "We have received several inquiries, but the indicative buying levels are too low, discouraging suppliers from selling," he explained for continued subdued trades.

Despite low activities, most sellers refused to undersell. "There isn't much pressure on sales amid low port-bound coal delivery and high coal burns at power plants. With the peak summer season only halfway through, significant price drops are unlikely, so we can continue monitoring the situation," said a trader source in northern China.

Several deals were reportedly made amid a bearish outlook for near-term demand among some traders. A vessel of 5,000 Kcal/kg NAR coal with 1% sulfur was heard to have changed hand at 750 yuan/t, against offers at over 760 yuan/t, while a deal for 4,500 Kcal/kg NAR coal was concluded at 657 yuan/t, compared with the asking levels at about 665 yuan/t.

"I'm sort of pessimistic on the future market. Companies that stockpiled earlier will need to sell in August. Given the inactive demand, prices would face downside risks in mid-August," said a trader source in eastern China.

High coal stocks held by power plants may still restrain demand for spot supplies. Data showed, coal stocks at power plants in some inland provinces were 7.2% higher than the year-ago level, while coal consumption showed a slower increase at 3%.

Despite subdued overall transactions, some participants anticipated that reduced stocks at northern ports would support thermal coal prices.

Coal stocks at northern ports dropped 2.8% on the week and 6.2% month on month to 23.73 million tonnes as of July 25.

On July 26, the CCI index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was at 856 yuan/t FOB with VAT, 5,000 Kcal/kg NAR coal was assessed at 758 yuan/t and 4,500 Kcal/kg NAR 657 yuan/t, all unchanged day on day.