Thermal Coal

Production area Thermal coal prices continued to fall in major producing regions. Downstream buyers only made on-demand purchases, while traders mostly sat on the sidelines following a leading mining group's downward adjustments of third-party coal buy prices. End-users eased purchases and pressed down prices consistently. Coal sales at mines showed no significant rebounds despite price cuts, further weighing on mine-mouth prices. The market is expected to continue its downtrend in the near term without favorable support in sight.

Northern port Spot transactions remained lackluster at northern ports. Traders exercised caution in shipping coal from mines to ports under thick wait-and-see sentiment. Despite ongoing reductions, traders' offer prices were still higher than end-user bids as they sought for significantly lower prices. As a result, power utilities slowed restocking from northern ports, eroding support for spot prices. Bearish sentiment will likely prevail in the short-term market.

Import market Sluggish sales dragged down the seaborne import market. Bidding prices to domestic utility tenders extended fall. The lowest bids for 5,500 Kcal/kg NAR high-sulfur and low-sulfur coal received by one utility in southern China were heard at 763.5 yuan/t and 767 yuan/t, CFR with VAT, respectively. Offers for Australian cargoes of the same grade were $1/t above the index, slightly higher than the domestic utility awarded prices. Indonesian 3,800 Kcal/kg NAR coal was offered at $52/t FOB on a Panamax basis. Given lower freight rates and depreciation of the yuan against the U.S. dollar, further attention should be paid to when domestic prices stabilize.

Coking coal

More coking coal mines suspended or cut production due to safety inspections or the completion of annual tasks, resulting in slight tightness in supply. But less pronounced reductions compared to previous years, coupled with tepid purchases, still resulted in relatively loose supply as a whole. Sustained declines in finished steel prices and growing expectations of further coke price cuts made steel and coke producers more cautious about procuring feed coal. Poor sales at mines further added to coking coal price slides.

Customs clearance at China's Ganqimaodu border port has surpassed its 2024 target of 40 million tonnes. Daily clearance hence hovered low at around 400 trucks recently. Sluggish trading activities pressed down Mongolian coal prices. Spot prices for Mongolian 5# raw coal stood at 930-950 yuan/t, while Mongolian 3# washed coal was at around 1,050 yuan/t, ex-stock Ganqimaodu with VAT.

Met coke

Environmental restrictions slightly disrupted coke production, but the overall supply remained relatively ample. Some steel mills cut molten iron output because of routine maintenance or environmental concerns, curtailing coke demand. High-stocked steel mills only made essential purchases. Futures and spot steel prices significantly retreated recently. This may be compounded by further price drops amid subdued demand during the seasonal lull, despite no significant imbalances between steel supply and demand. Limited cost support, diminishing steel demand, and fading macroeconomic positives may further pressure coke prices in the short run. Steelmakers might mull over the fifth coke price cut.