Thermal coal prices continued moving south at major northern China ports at the start of the week, with some 5,000 kcal/kg NAR grades breaching key psychological support levels, despite eased bearish sentiment following a moderate pickup in inquiries late last week.

Sentiment improved marginally as earlier sharp price cuts and expectations of year-end supply tightening in production regions prompted some buyers to cover short positions. However, persistently high port inventories and subdued power-sector demand continued to outweigh near-term supportive factors, delaying any meaningful price stabilization.

Sources reported a moderate rebound in inquiries. Although indicative buying levels remained below the CCI benchmark indexes, their spreads marginally narrowed.

"The market looks slightly better at the start of the week; some buyers are pegging their 5,000 Kcal/kg NAR coal prices at 10 yuan/t discounts to the CCI indexes, compared with 15 yuan/t or so discounts last week," said a Zhejiang-based trader source.

On December 22, the CCI Index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port stood at 708 yuan/t FOB with VAT, falling 8 yuan/t from late last week. The Indexes for 5,000 Kcal/kg and 4,500 Kcal/kg NAR coal were 607 yuan/t and 507 yuan/t, respectively, both down 7 yuan/t.

Even so, bidding prices to utility tenders have largely fallen below the psychological supporting level of 600 yuan/t, suggesting the downtrend is likely to persist, albeit at a slower pace than in previous weeks, the source added.

The overall trading activity at major northern Bohai-rim ports stayed thin,  while swelling inventories still eroded traders' bargaining power.

Sxcoal's data showed that coal stocks at Qinhuangdao, Caofeidian, and Jingtang ports stood at 28.18 million tonnes on December 22, climbing 18.37% month on month and exceeding the year-ago level by 10.97%. The figure also exceeded the 2022-2024 range. Outflows retreated 33.68% month on month and 25.25% on the year, significantly below the same-period readings in recent years.

The data point to a high likelihood of further stock accumulation this week, dampening prospect for a near-term price stabilization.

Downstream demand remained lackluster. Power and non-power sector users kept actual procurement cautious without a meaningful increase in operating loads. Coal consumption at inland power plants, primarily fed by domestic resources, stagnated last week and remained well below the year-ago level, data showed.

Participants remained cautious, citing insufficient fundamental support through the rest of the month. Some reckoned a possible improvement only likely to emerge in late January.

Import low-CV coal prices level off

The seaborne import market showed relative resilience, particularly for low-CV grade. Indonesian 3,800 Kcal/kg NAR offers were heard at $47-48/t FOB on a Panamax basis for January delivery, with cargoes below $47/t becoming increasingly difficult to source.

Anticipated tender activity from Chinese utilities this week also provided modest support, sources said.

Additional support stemmed from Indonesian supply-side constraints, including delays in RKAB quota approvals, seasonal weather disruptions, and lingering uncertainty over potential export duties.

Freight rates from South Kalimantan to South China for Panamax vessels hovered around $5.5/t, providing limited additional support to prices.

Higher-CV inquiries also increased compared with recent weeks, though buyers continued to push for lower prices, resulting in sustained hard negotiations.

On December 22, the CCI Index for Indonesian 3,800 Kcal/kg NAR coal stayed unchanged from late last week at $44.5/t FOB, while the index for Australian 5,500 Kcal/kg NAR coal fell $0.7/t to $89.0/t CFR.