Thermal Coal

Production area Thermal coal miners continued to cut prices to boost sales, slightly attracting restocking from chemical and coking plants. This helped alleviate inventory pressure at some mines. However, railway station-based traders and washing plants remained cautious of purchases. Most mines still suffered from offtake difficulties due to a lack of demand, pressing down mine-mouth thermal coal prices in the near term.

Northern port Bleak spot demand further dragged down the portside market. Traders resorted to slashing prices to promote sales but still experienced tepid transactions. It is difficult to predict a bottoming out of portside prices without robust demand support. Miners and power utilities tend to adopt a wait-and-see approach during the period of long-term contract signing. Future attention should be paid to the outcomes of these contracts and coal sales at northern ports.

Import market The seaborne import market weakened amid subdued demand. Domestic coal prices declined consistently, eroding the pricing edge of imported coal. Some traders expected overseas offer prices to continue retreating in the short run. Chinese power utilities exercised caution in purchases with a bearish outlook on the future market.

Coking coal

Though coking coal supply slightly tightened this week as some coking coal mines capped production due to a mine accident or nearing completion of annual production tasks, the overall supply remained at relatively high levels. Most coke producers continued to moderately increase feed coal stocks for winter storage. Middlemen, wary of future risks, focused on selling existing goods. Lukewarm trading activities further prevented high-priced cargoes from finding buyers. Miners reported sustained stock accumulation but satisfactory sales of low-priced coking coal grades, keeping mine-mouth offers largely stable. Nevertheless, increasing seasonal blast furnace maintenance at steel mills and relatively loose supply-demand fundamentals may further cloud coking coal prices.

Cargoes of Australian hard coking coal were sold to Indian buyers at $224.5-225/t CFR India on December 12, equivalent to about $209/t FOB Australia, rising $3.7/t week on week. This could translate to about 1,850 yuan/t CFR China with VAT, still higher than domestic similar-quality coal.

Met coke

Recent Politburo meeting cheered market confidence, slightly driving up finished steel prices and preserving steelmaking profits. Some steelmakers showed interest in coke purchases, but the seasonal lull still dampened spot steel transactions. This, coupled with ongoing blast furnace maintenance and declining molten iron output, pressured coke demand. Continued reductions in feed coal prices further benefited coke producers, making them stay profitable even after the fourth coke price cut. Coking plants hence operated normally, maintaining loose supply.