Thermal coal trading at northern transfer ports in China remained subdued, with buyers expecting even lower prices following price cuts by some traders. This led to persistent bid-ask spreads, limiting overall transactions.

"Sales have been challenging. We are targeting 5,000 Kcal/kg NAR coal with 0.89% sulfur at 750 yuan/t FOB with VAT, but some downstream users are looking to buy at 740-745 yuan/t," said a Tianjin-based seller.

A batch of same-CV coal at Jingtang port in northern China was sold by a trader at 5 yuan/t below the index.

Some participants believed that prices would continue to decline, as certain traders with high inventory wanted to reduce prices further to boost sales.

"The peak consumption periods in the second half of July and early August failed to boost coal demand from power plants, making it even unlikely to see a rebound for the rest of August," said a Zhejiang-based traders source.

A Fujian-based trader source anticipated a potential price drop of about 20 yuan/t in this round of price adjustments due to anticipated fading heatwaves in eastern and southern areas, such as Shanghai and Zhejiang. "Traders are keen to offload stocks before deeper losses occur by the end of the month."

Coal consumption at power plants of inland provinces has stayed range-bound at 3.7-3.9 million tonnes after falling from the recent high of 3.98 million tonnes on July 24, data showed. This indicated coal burns at power plants may have plateaued and are expected to dip once heatwaves diminish.

Coal consumption at power plants in coastal provinces has remained elevated since early August, exceeding 2.4 million tonnes, with no signs of increasing further, data showed.

Several buying indications for 4,500 Kcal/kg NAR coal were heard at about 645-650 yuan/t FOB with VAT at northern ports, while offers were above 660-665 yuan/t, according to trader sources. Liquidities for 5,500 Kcal/kg NAR coal were even thinner, with few inquiries.

On August 9, the CCI index for 5,500 Kcal/kg NAR thermal coal traded at north China port was 851 yuan/t FOB with VAT, down 2 yuan/t day on day; the 5,000 Kcal/kg NAR and 4,500 Kcal/kg NAR grade was assessed at 750 yuan/t and 649 yuan/t, respectively, falling 3 yuan/t and 2 yuan/t respectively from the day before.

Import thermal coal prices under pressure

More importers in China shifted to a wait-and-see stance amid inactive tender invitations from major power utilities and low bidding prices to tenders recently released.

Bids received by power utilities for 3,800 Kcal/kg NAR coal were generally below 500 yuan/t DDP with VAT or roughly $53/t FOB East Kalimantan on Panamax basis, which made it challenging for traders to secure shipments with arbitrage.

"Offers from foreign sellers drop slowly but will continue to fall. The Panamax cargoes of 3,800 Kcal/kg NAR coal with late August-loading laycan are tradable below $53/t FOB, but power plants presented limited interest, with individual bids below $51.5/t" said a Fujian-based trader source.

Supply from Indonesia was broadly stable, except for a few miners facing loading issues due to low water levels, sources said.

For higher-CV grades, inquiries from China remained lukewarm, with power plants mostly covering demand for August.

While an offer of Capesize 5,500 Kcal/kg NAR cargo with August laycan was heard at $89/t FOB Newcastle, buying indications were $2-3/t lower, traders said.