China's coking coal prices experienced downward corrections broadly in main production areas, especially as several steel mills started to press for the fifth coke price reduction on December 25, discouraging market participants from active trading activities.

Although a growing number of coal miners reduced or halted production due to the completion of annual output targets or priority over safety, it is believed to leave limited impacts on the overall supply given that the decrement would be made up after the New Year festival.

The CCI index for Shanxi low-sulfur primary coking coal stood 30 yuan/t lower than a day ago at 1,425 yuan/t on December 26, ex-washplant with VAT, while that for mid- and high-sulfur primary coking coal stood at 1,280 yuan/t and 1,253 yuan/t, respectively, both unchanged.

In Xiangning, Linfen of Shanxi, offer prices for primary coking coal and lean coal decreased by 40-80 yuan/t, effective December 26, sending the total decline to 270-440 yuan/t since late October, Sxcoal understood.

The new prices for low-sulfur primary coking coal (S 0.6%, A 10%, GRI 90) and high-sulfur primary coal (S 3.6%, A 12%, GRI 75) in the region dropped 80 yuan/t to 1,340 yuan/t and 925 yuan/t, respectively, ex-washplant with VAT and in cash. Low-sulfur lean coal (S 0.7%, A 10.5%, GRI 70) and low-sulfur lean coal (S 0.7%, A 10%, GRI 50) prices fell to 1,280 yuan/t and 1,190 yuan/t, down 80 yuan/t and 40 yuan/t, respectively.

Miners in Zichang of Yan'an, Shaanxi adjusted down spot offers of washed gas coal (S 0.5%, A 8-8.5%, GRI 85) by 40 yuan/t to 1,010-1,040 yuan/t, ex-washplant with VAT, bringing the aggregate decrement to 210 yuan/t since October.

Online auctions also recorded abated settlement levels and failures increased. One Linfen-based miner completely failed to conclude a trade of 30,000-tonne fat raw coal with 4% sulfur content even after cutting back the starting price by 50 yuan/t to 500 yuan/t compared with December 25.

On December 25, a large miner in Xiangning put 15,000 tonnes of low-sulfur lean coal (S 0.6%, A 10.7%, GRI 73) for auction at 1,310 yuan/t, down 50 yuan/t from the last deal, yet all the cargo was abandoned. The miner also sold 3,000 tonnes of low-sulfur lean coal (S 0.4%, A 10%, GRI 65) at 1,160 yuan/t after starting at 1,155 yuan/t, but the remaining 12,000 tonnes were aborted.

Declining molten iron output and healthy coke stockpiles at steel mills restrained them from restocking. Meanwhile, sluggish transactions and weakened prices of steel products pushed mills to seek profits from coke makers.

Consequently, coking plants slowed or suspended purchases of feed coal in light of ongoing risks alongside the inauguration of the fifth round of coke price cuts. Traders and washing plants were eager to quicken sales by slashing prices, adding to coal mine selling pressure.

Coking coal prices in Wuhai, Inner Mongolia experienced accelerated declines ranging 30-40 yuan/t this week compared to the previous two weeks, Sxcoal learned, with further drops expected amid growing sales setbacks across local miners.

Nevertheless, Wuhai-based coking coals witnessed less price competitiveness than other premium coal grades due to slower price declines.

The slower declines of coking coal in Wuhai were mainly attributed to localized supply contraction and a shift of sales strategies, according to Sxcoal's survey.

A severe mine accident earlier led to more stringent safety checks in the region and miners have yet to resume full-capacity production. Furthermore, improved financial performance prompted local miners to scale back or stop sales when the local coal market weakened, in a bid to slow down the decline rate of raw coking coal.

Meanwhile, Wuhai-based coking coals faced challenges from cost-effective Mongolian materials and increasing Mongolian coal flows to Xinjiang.

Prices of coking coal in Wuhai are expected to decrease further and see narrower spreads compared to backbone grades in other regions.