Thermal Coal

Production area Thermal coal prices stabilized in major producing regions late last week, with some mines slightly raising prices. Miners kept prices stable thanks to acceptable inventories backed by reduced output approaching the month-end and also regular sales. A few mines saw mixed price movements, with more upticks observed. Private thermal coal mines are expected to gradually close for holidays after New Year's Day and leading up to the Spring Festival, which may result in supply tightness and slight price rebounds.

Northern port Sentiment picked up in the portside market recently. As month-end nears, moderate short-covering demand has boosted spot inquiries, leading to increased transaction prices. More mines halted production by end-December, and coal shipments via railway continued to slide, helping accelerate destocking at northern ports and subsequently easing the previous supply surplus. However, power utilities still showed low purchasing enthusiasm. Traders noted that the sustainability of current price increases would largely hinge on end-user demand release.

Import market While stabilizing domestic prices boosted interest in importing coal, import coal prices remained broadly unchanged. Spot import coal prices have hit the lowest levels so far this year. Production costs at foreign mines could possibly limit further drops in import coal prices. Australian 5,500 Kcal/kg NAR coal was offered at 770 yuan/t, while bidding prices for Indonesian 3,800 Kcal/kg NAR coal tenders ranged 462-469 yuan/t, both CFR South China with VAT.

Coking coal

Some coking coal mines suspended operations after reaching annual production targets or amid mining accidents, resulting in temporary supply contractions. However, the overall supply remained relatively loose given elevated stocks at mines. With the fifth coke price cut materialized, bearish sentiment further spread among participants. Steel and coke producers only bought as needed, curbing spot coking coal transactions and causing sustained price declines.

Mongolian coal inflows at China's Ganqimaodu border port hovered low at around 400 trucks per day. Lukewarm buying appetite dampened Mongolian coal transactions, further weakening prices. Spot prices for Mongolian 5# raw coal stood at 910-940 yuan/t, while Mongolian 3# washed coal was at 1,020-1,030 yuan/t, ex-stock Ganqimaodu with VAT.

Met coke

The fifth coke price cut materialized, taking the cumulative reduction to 250-275 yuan/t since late October. While environmental restrictions disrupted operations at some coking plants, most plants still maintained high production enthusiasm as diminishing feed coal costs helped secure profits. But their offtake pressure was growing alongside more blast furnace maintenance at steel mills that has reduced molten iron output. Steelmakers mostly reported increased coke stocks. This, along with loose coke supply-demand fundamentals and a lack of cost support, may further weigh on coke prices in the near term.