Thermal Coal

Production area Mine-mouth thermal coal prices declined repeatedly in major producing regions amid demand woes. Chemical plants only made on-demand purchases, while traders mostly sat on the sidelines given growing bearish sentiment. Most mines reported moderate offtakes even after price reductions as a leading mining group adjusted down buy prices for third-party coal and some end-users continued to press for lower prices. Additionally, poor demand from surrounding coking plants widened drops in lump coal prices. Thermal coal prices are expected to weaken further in the near term due to a lack of favorable support.

Northern port Traders continued to cut offer prices. Downstream buyers only inked limited short-covering orders and were keen on pushing down prices, leading to cold trading activities. Despite sustained drops in portside prices, traders were reluctant to sell premium low-sulfur thermal coal at lower prices. However, high stocks at ports, persistently falling mine-mouth prices, and low short-covering inquiries failed to shore up spot prices. Overall sluggish demand will further drag down portside prices in the short run.

Import market Imported coal prices trended downwards alongside persistent drops in the domestic market, with FOB prices decreasing accordingly. Australian 5,500 Kcal/kg NAR coal was offered at $84-88/t FOB, while Indonesian 3,800 Kcal/kg NAR coal amounted to $52.5-53/t FOB on a Panamax basis. Traders expected FOB prices to retreat further, mainly owing to a bearish outlook on the future market and expectations of yuan depreciation against U.S. dollar.

Coking coal

Coking coal mines largely maintained previous production levels, keeping overall supply loose. Market participants mostly adopted a wait-and-see approach due to a lack of significant positive announcements from the recent national economic meeting. Coking plants started to replenish with winter storage approaching, but it was not enough to boost coking coal demand significantly. Coking coal prices hence continued sliding, with some grades seeing price reductions of 50-80 yuan/t late last week.

Coal stocks hovered high at supervision warehouses at China's Ganqimaodu border port. Low receiving capacity caused reduced Mongolian coal inflows at the border. Daily customs clearance averaged 753 trucks last week, down 113 trucks from a week ago. Downstream buyers only purchased as needed, restraining Mongolian coal offtakes. Offer prices for Mongolian 5# raw coal stood at about 980 yuan/t, ex-stock Ganqimaodu with VAT.

Met coke

As macroeconomic positives faded, market focus returned to the reality. Some coke producers cut output due to sales pressure and environmental concerns. Coking plants reported slow offtakes, especially for wet-quenching coke. Coke stocks hovered high at steel mills. Loose supply-demand fundamentals and diminishing cost support increase the downside likelihood for near-term coke prices.