China's PCI coal prices basically held steady during the past week, as the equilibrium between supply and demand of PCI coal contributed to the market's stability, with minimal fluctuations in pricing and demand, and no obvious favorable factors emerging to support rebound.

On December 23, the Fenwei CCI index for Changzhi PCI coal (A 11.5%, V 12, S 0.5%) was 1,000 yuan/t, ex-washplant with VAT, remaining flat week on week.

Fenwei assessed Yangquan PCI coal (A 10%, V 8, S 0.6%) in Shanxi at 1,096 yuan/t on the same day, also unchanged from the week before; the assessment for Jiaozuo PCI coal (A 12%, V 7, S 0.3%) in Henan stayed flat at 1,147 yuan/t.

Steelmakers showed abated production enthusiasm as demand remained tepid in current slack season, and profits showed no sign of improving in the near term.

Since PCI coal is a critical input in blast furnace operations, steelmakers' reduced production pressured coal prices and demand.

The Federal Reserve on December 18 lowered its key interest rate by a quarter percentage point, but indicated a cautionary tone about additional cuts in coming years, which hit market sentiment severely.

This, combined with colder temperature, further dented demand for steel mills.

Thin trades and cautious attitude for winter procurement weakened supports for steel product prices, forcing mills to continue overhauls and resulting in lower molten iron production.  

Data showed the price of Shanghai HRB 400 rebar (20 mm) stood at 3,390 yuan/t on December 23, falling 40 yuan/t from the week-ago level, while Shanghai hot-rolled coil (3.0 mm) fell 40 yuan/t on the week to 3,540 yuan/t. Tangshan Q235 billet price also dropped 40 yuan/t week on week at 3,060 yuan/t.

Analysts anticipate that PCI coal prices will remain within a narrow range into the first quarter of 2025, with limited upside factors and downside risks mitigated by higher mining costs.