China's coking coal market remained largely subdued midweek as buyers adopted a cautious wait-and-see approach alongside a renewed decline in futures prices after a brief policy-driven rebound.

On December 11, the CCI index for Shanxi low-sulfur primary coking coal stood stable day on day at 1,540 yuan/t, ex-washplant with VAT, and that for mid- and high-sulfur primary coking coal stood at 1,390 yuan/t and 1,358 yuan/t, respectively, both unchanged.

Most coking coal miners in major producing regions maintained their previous production levels, contributing to a loose supply on the whole.

Demand for spot cargoes remained tepid across major purchasers, with coke makers largely buying only to meet immediate needs. Meanwhile, speculative traders and washing plants opted to sell off inventories to avoid potential losses, Sxcoal understood from sources.

As they were not in a rush to replenish coking coal for the peak winter season, coke producers did not plan large-scale procurements.

"We are keeping feed coal stocks enough for about one week of usage and will not purchase more in the near term," said a coke producer source based in Shaanxi, adding that some purchases from Inner Mongolia were made recently just because of an expectation of further increases in freight rates due to snowfall.

Multiple miner sources reported normal dispatches and offered comparatively stable prices with waning downward pressure on the near-term coke market on the back of rising steel prices. One Shaanxi-based coal miner noted balanced production and sales in recent days. Some cargoes in Zichang of Yan'an in Shaanxi experienced sales setbacks after price upticks.

Mongolian coal inflows and trades subdued

Mongolian coal inflows via China's Ganqimaodu border port decreased sharply this week as port authorities imposed restrictions on coal truck clearances due to excess inventories at some supervision warehouses.

Ganqimaodu saw a daily average of 696 trucks hauling Mongolian coal pass through during December 9-10, a drop of 225 trucks week on week, Sxcoal's tracking data showed.

Trading activities of imported Mongolian coking coal stagnated further amid the lackluster domestic market. Spot prices of Mongolian #5 raw coking coal under long-term contracts stood at 980-1,000 yuan/t, ex-stock Ganqimaodu, with VAT, falling 40-50 yuan/t from a week ago.

In addition, Mongolian miner Energy Resources LLC failed on December 11 to sell Mongolian 3# washed coking coal (S 0.85%, A 11%, VM 20-28%, GRI 75) for the 21st time since November on the Mongolian Stock Exchange, after starting at 1,000 yuan/t, DAP Ganqimaodu border port and exclusive of VAT.

The miner had maintained the starting level stable at 1,050 yuan/t for two months and a half since mid-September before adjusting down the price from December 6 to 1,000 yuan/t, reflecting demand weakness among end-users.