Thermal coal prices in China's major producing regions showed easing declines after long-term weakness, even with 5-10 yuan/t tentative rises observed at a few mines, mainly due to stabilized portside price and slightly tightened supplies approaching the year-end.

Of the 90 coal mines surveyed by Sxcoal on December 26, three mines raised prices by 11.67 yuan/t averagely, while ten mines lowered prices by an average of 27.2 yuan/t. The remaining 77 mines kept prices stable.

Some thermal coal mines halted or cut operations approaching both the month- and year-end after reaching production goals, modestly reducing supply and subsequently boosting coal sales at some operational mines. Increased coal trucks arrived at those mines offering extremely low prices.

As pre-New Year's Day short-covering purchases led to the deceleration in portside price slides, some traders were reluctant to undersell. Combined with stable third-party coal buy prices provided by a leading mining group, the frequency and magnitude of mine-mouth price reductions slowed backed by on-demand purchases. A few miners in Shaanxi and Inner Mongolia even explored to raise prices moderately.

Additionally, some miners whose prices have fallen near break-even points exhibited resistance against further price cuts, alongside the upcoming holiday.

However, traders and washing plants remained cautious amid unclear price movements in the near term, hesitant to buy excessively. Many traders have already withdrawn from the market, hindering spot transactions. While some still engaged in trading, the small volumes were not enough to cause significant ripples in the market.

The non-power demand remained sluggish, evidenced by increasing seasonal shutdowns in industries like cement and construction materials. Limited essential purchases from chemical plants, coupled with expected post-holiday production suspensions, further curbed spot thermal coal demand.

Power utilities also showed low restocking interest given high stocks and continued intakes of imported cargoes with better pricing edges. As of December 23, daily coal consumption at utilities surveyed by Sxcoal amounted to 6.56 million tonnes, falling 2.22% from a year ago, while their raw material inventories outpaced the year-ago levels.

One power generator said that with the utilization rate hovering around 60%, current thermal coal stocks could sustain 15 days of usage. "We prioritize regular purchases and are less likely to make large-scale restocking ahead of the Spring Festival," the source added.

In Ordos, Inner Mongolia, one miner reported slightly improved sales as many mines ceased operations and a leading mining group kept third-party coal prices unchanged, indicating signs of market stabilization.

Another miner in the region raised prices for 5,700 Kcal/kg NAR chemical coal with 0.52% sulfur by 10 yuan/t to 610 yuan/t with VAT thanks to decent sales. "We will maintain normal operations to offset previous output shortages because of longwall changes," the miner said.

Thermal coal prices in Shaanxi saw mixed movements. 6,100 Kcal/kg NAR washed coal dropped 10 yuan/t to 611 yuan/t, mine-mouth with VAT, while 4,100 Kcal/kg NAR raw coal increased by 10 yuan/t to 381 yuan/t, effective from December 26 to January 2. One Yulin-based miner kept daily output at around 8,000-9,000 tonnes and reported almost no stocks after sustained price drops. He noted that most power utilities were not eager to ink orders because of term-contract shipments. Only a few sought spot resources ahead of the holiday without signing long-term agreements.

In Xinzhou, Shanxi province, 4,300-5,200 Kcal/kg NAR slack coal with 2.2% sulfur prices declined 50 yuan/t to 510 yuan/t with VAT, pressed down by inactive procurements from downstream buyers, further suppressing miners' production enthusiasm.

After three consecutive months of declines, market participants, particularly middlemen, have reached a point of near-exhaustion. Frequent talks of production halts and decreased supply this week, together with potentially growing coal burns at power plants boosted by further dropping temperatures, injected confidence among traders.

However, coal offtakes in key thermal coal bases showed no substantial improvements despite price slides. Online auctions also encountered setbacks with thin trading liquidity.

Meanwhile, advancements in automation over recent years could largely make up for output contractions during holiday closures. As a result, miners believed that mine-mouth prices would be hard to stabilize in the short run.

On December 26, Sxcoal assessed Datong 5,500 Kcal/kg NAR thermal coal at 608 yuan/t mine-mouth with VAT, down 2 yuan/t day on day, while that for Ordos 5,500 kcal/kg NAR stayed stable at 565 yuan/t. Yulin 5,800 kcal/kg NAR coal was at 619 yuan/t, 1 yuan/t lower than the previous day.