Thermal Coal

Production area Subdued demand and bearish sentiment continued to push down thermal coal prices in major producing regions. Most mines saw modest price reductions of about 10 yuan/t, while a few experienced larger drops of 20-30 yuan/t, which helped improve sales. However, traders mostly withdrew from the market in anticipation of further price drops in the short run, adding to demand woes. Future attention should be paid to how mine shutdowns for holidays might affect mine-mouth prices.

Northern port Downstream buyers kept a hard bargain, resulting in sparse transactions and consequently pressing down portside prices. Participants believed that near-term prices lack sufficient upward momentum, in light of sustained declines in mine-mouth prices, slow destocking at ports and power utilities, and unfavorable macroeconomic policies.

Import market Overseas offers temporarily stabilized due to thin trading liquidity during the Christmas holiday, with Indonesian 3,800 Kcal/kg NAR coal quoted at $52/t FOB on a Panamax basis. Domestic power utilities made inactive purchases and sought for lower prices, driving down bidding prices to utility tenders. Bidding prices outpaced offering levels from foreign sellers, coupled with continued decline in domestic prices, compounding traders' pessimism.

Coking coal

Some coking coal mines halted or cut production after reaching annual targets, moderately reducing output in major coking coal bases but failing to reverse loose supply-demand fundamentals. With growing expectations of the fifth coke price cut, coking plants further eased feed coal purchases, causing stagnant transactions. Online auctions saw high failure rates. Prices for many coking coal grades continued to slide, with Anze low-sulfur primary coking coal down to 1,500 yuan/t.

Mongolian coal inflows at China's Ganqimaodu border port hovered low at around 500 trucks per day after achieving annual customs clearance goals, alleviating inventory pressure at supervision warehouses. However, bleak sentiment and lackluster purchasing enthusiasm further dampened Mongolian coal offtakes, thereby threatening prices. Mongolian 5# raw coal fell to around 930-950 yuan/t, ex-stock Ganqimaodu with VAT.

Met coke

While environmental inspections slightly disrupted coke production in Shandong, Shaanxi and Henan, the overall coke supply still stayed elevated as most coking plants maintained high production amid expanding profits. Feed coal prices continued moving lower, evidenced by repeated declines in blending coking coal prices. Retreating finished steel prices, along with excess coke inventories at mills, prompted some steelmakers to push down coke prices again. Declining molten iron output eroded coke restocking needs, leading to stock rises at coking plants. The coke market is expected to weaken further with worsened imbalance between supply and demand.