Online auctions of coking coal softened in China's main production areas, with most deals settling with reduced premiums and some failures amid coke producers' more rational sentiment in the face of market weakness.

Participants adopted a prudent approach in purchasing due to thickening bearish macroeconomic expectations and volatile futures prices, leading to lackluster transaction results, particularly in the leading coal base Shanxi.

In Luliang city of the province, one miner put 10,000 tonnes of coking coal (S 2.9%, A 10.5%, GRI 85) for sale at 1,170 yuan/t on December 18, down 10 yuan/t from December 4, and the trade was fully closed at 1,170 yuan/t, also a 10 yuan/t drop from the last session, Sxcoal learned.

A second miner in the region successfully auctioned 10,000 tonnes of coking coal (S 0.6%, A 11%, GRI 88) at 1,460-1,465 yuan/t on December 17, 30 yuan/t lower than the hammer prices for the same-grade coal trade on December 3.

Some miners registered auction failures affected by bleak demand. A total 2,000 tonnes of coking coal (S 1.3%, A 11%, GRI 90) offered by a Linfen-based miner were completely abandoned after starting at 1,380 yuan/t, down 70 yuan/t compared to a successful deal on December 13. In Jinzhong city, a miner failed on December 17 to sell all the 4,000 tonnes of mid-sulfur fat coal (S 1.3%, A 14%, GRI 95) with a starting price of 1,350 yuan/t.

Some miners reckoned difficulties receiving new orders and had to adjust down offers to attract buyers. Traders and washing plants also prioritized actively selling over procurements amid ongoing risks.

On December 18, two out of the 20 Sxcoal-contacted coal miners trimmed prices, while the remaining 18 kept price levels steady, with no one raising offers, daily survey data showed.

"We hold primary coking coal and meager lean coal stocks of over 30,000 tonnes due to stagnated trading activities," a Shanxi-based coal trader told Sxcoal.

Overall coking coal supply tightened slightly as some mines implemented production curbs after completing annual targets or due to underground mining issues, but insufficient demand still largely clouded the market.

Multiple sources pointed out no signs of improvement in the short run in light of the persistent supply surplus, and high social production and inventories. Some even anticipated further coke price cuts in the near future.

One Shandong-based miner source noted unsmooth sales even after price reductions, and limited winter restocking demand among adjacent coking plants.

On December 18, 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 1,370 yuan/t and 1,338 yuan/t, respectively, both unchanged.

Regarding imported Mongolian coal, coal stocks have accumulated to considerably high levels at supervision warehouses at China's Ganqimaodu border crossing amid surging imports and tepid demand. This curtailed Mongolian coal truck inflows via Ganqimaodu lower than 1,000 each day since December 6, with the truck clearance this week down below 650.

Traders continued to cut Mongolian coal offer prices given slack end-user demand. Spot offers for Mongolian 5# raw coking coal under long-term contracts fell to 970-980 yuan/t, ex-stock Ganqimaodu with VAT, down 10-20 yuan/t week on week and 110-120 yuan/t month on month.

Additionally, Mongolian miner Energy Resources LLC failed to sell Mongolian 3# washed coking coal (S 0.85%, A 11%, GRI 75) on the Mongolian Stock Exchange for the 26th consecutive session on December 18, even though the miner reduced the starting price by 50 yuan/t on December 6.