Indonesian thermal coal market remained subdued, as Chinese buyers refrained from locking spot cargoes, owing to limited growth in coal consumption at power plants and an accelerated decline in domestic prices.

On December 10, the CCI index for Indonesian 3,800 Kcal/kg NAR thermal coal stood at $59.5/t CFR South China and $51.7/t FOB Kalimantan, both unchanged compared with the preceding day.

Chinese utilities have shown reduced interest in floating tenders recently, shifting their focus to February laycan supplies due to ample stocks and moderate consumption.

Coal stocks at power plants under six major Chinese power groups, mainly burning imported fuel, stood at 14.46 million tonnes on December 9, up marginally by 0.33% week on week yet retreating 3.14% from a month ago. These stocks could cover 17.78 days of usage, roughly flat week on week though falling 1.53 days from the previous month.

The ongoing cold front, which is forecast to lower temperatures by 4-6℃ across much of China from December 10, may push up coal consumption at power plants in inland provinces. However, some southern provinces are less likely to see significant temperature drops, as the cold front usually weakens moving south.

Sxcoal's tracking data showed the overall coal burns at power plants only saw a 0.44% week-on-week rise on December 9. Some participants reckoned a likely slow rebound in coal burns in the following week would not significantly lower stocks or increase usage.

Sluggish demand, together with the previous decline in seaborne freight rates, have forced a few traders to cut their bids to utility tenders for 3,800 Kcal/kg NAR coal below 480 yuan/t CFR China with VAT to compete for orders, against the cost for prompt-delivering cargoes at around 500 yuan/t.

On December 6, one Chinese state-run utility awarded a cargo of the same-CV coal at 479 yuan/t, translating to about $51.6/t FOB East Kalimantan for February delivery.

However, that marked a loss compared to offers from Indonesian sellers at $53-53.5/t FOB for the same Panamax basis.

A Guangdong-based importer in southern China reported demand from one utility for one or two spot cargoes with delivery in late and early January, while temporarily halting demand for distant-month cargoes.

Given the thick wait-and-see sentiment and dull demand from power plants, the source foresaw potential floor prices for Indonesian 3,800 Kcal/kg NAR coal at around $50/t.

While offers of Supramax cargo of same-CV coal were heard at $52/t with loading laycan between December 15-30, bids were $1-1.5/t lower.

Some importers remained bearish over the near-term market, fearing the ongoing decline in domestic prices would drag down utilities' buy levels further and make it even harder to liquidate.

Mine-mouth thermal coal prices in China extended the decline on December 10, with more miners opting to lower prices by 10-30 yuan/t compared with the week-ago levels due to oversupply. Miners in the top coal province Shanxi maintained high production enthusiasm to meet their annual production targets, sources said.

Portside market was also subdued with limited activities, although increasing traders intended to boost sales by further cutting down prices. High coal stocks at power plants and northern ports kept hindering their releasement of new orders.

While participants mostly being negative about the 2025 market, some started to bank on the recent positive signs from the Politburo meeting to incentivize trading activities. The country would adopt an "appropriately loose" monetary policy next year, according to the meeting, marking the first easing of its stance in some 14 years.

The government has also pledged to step up "unconventional" counter-cyclical adjustments, boost consumption, and stabilize housing and stock markets.