China's coking coal trading activities stayed lukewarm as a whole at the beginning of this week, with limited buying strength from coking plants and continued prudence among traders slackening coal sales in major producing regions.

On December 16, the CCI index for Shanxi low-sulfur primary coking coal stood stable from last Friday at 1,540 yuan/t, ex-washplant with VAT, and that for mid- and high-sulfur primary coking coal stood at 1,370 yuan/t and 1,338 yuan/t, respectively, both unchanged.

Coking plants have gradually stepped into a restocking period for the peak winter season, but they only scaled up purchases slightly to avoid potential risks and resisted high-priced grades given contracted margins after the fourth round of price cuts, Sxcoal learned from sources.

As coke demand remained under pressure given reduced molten iron output and an expectation of further declines, coke firms were generally cautious in placing new orders and reluctant to build more stocks. Meanwhile, speculative traders exited the market and retreated to the sidelines.

This pushed more coke producers to continue seeking profit margins from coking coal miners. Spot prices of coking coal decreased by 50-80 yuan/t last weekend, sources said.

"Downstream users refuse to buy if we don't lower prices, and further price drops are expected if sales go badly even after price corrections," said a miner source based in Shanxi.

Coking coal miners in Xiangning, Linfen of Shanxi, lowered some prices of primary coking coal and lean coal by 30-80 yuan/t, effective December 16, sending the total decline to 230-360 yuan/t since late October. Prices of low-sulfur primary coking coal (S 0.6%, A 10%, GRI 80) and low-sulfur lean coal (S 0.7%, A 10.5%, GRI 70) fell 30 yuan/t to 1,420 yuan/t and 1,360 yuan/t, both on ex-washplant basis with VAT and in cash. High-sulfur primary coking coal (S 3.6%, A 12%, GRI 75) dropped 80 yuan/t to 1,005 yuan/t.

Some miners cut back production owing to accidents, underground mining issues or the near-to-completed annual targets, yet the overall supply remained at a high level. Multiple miner sources stated they have taken production safety as a priority after completing annual output goals and found it hard to hike prices amid slow shipments.

Coal sales at some mines with deeper-than-average price cuts were better, with miners seeing not large inventory pressure so far, while the rest generally experienced stock buildups. One Shaanxi-based miner pointed out stockpiling due to snowfall-disrupted transportation and tepid buying appetites.

In terms of the imported Mongolian coal, traders reported sales setbacks amid tepid end-user demand. Coking coal stocks accumulated high at supervision warehouses of Ganqimaodu border crossing, capping Mongolian coal truck inflows.

Mongolian #5 raw coking coal was offered at around 980 yuan/t, ex-stock Ganqimaodu with VAT.