Thermal coal prices at China's northern transfer ports saw declines slow due to tightening supply from mining areas and emerging power plant demand, despite persistently high inventories. More sellers held back cargoes cautiously in anticipation of firmer buying interest, though weak fundamentals still limit significant price rebounds.

On December 29, the CCI Index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port stood at 680 yuan/t FOB with VAT, falling 2 yuan/t from late last week. The Indexes for 5,000 Kcal/kg and 4,500 Kcal/kg NAR coal were 586 yuan/t and 490 yuan/t, both unchanged.

Transactions for 5,000 Kcal/kg NAR coal improved modestly, with a high-sulfur deal last weekend settling at a 5 yuan/t discount to the weekly average of the CCI 5000 index.

"Many aren't eager to sell right now," said a Qinhuangdao-based trader source, noting efforts to firm up prices and test for rigid procurement needs after prolonged drops.

A few sources disclosed that select premium low-sulfur resources in tighter availability even saw tentative upticks. One Zhejiang-based trader source reported offers of 4,500 Kcal/kg NAR cargoes at a premium to the CCI 4500 index in the morning.

"Demand is emerging regionally, but we'll watch the afternoon and tomorrow trades to confirm if prices are steadying," the source noted.

Reduced supply from mines approaching month-end quotas and emerging price upticks at key mining areas are expected to cushion the downside for portside prices.

Yet, power plant loads remained subdued in some regions, especially in eastern China, where higher wind and solar output reduced coal burns across power plants to far below typical levels. "Coal consumption is very low, and with strong renewables, it's hard to see coal prices rise," one source from a Shandong-based power plant commented.

Traders expected short-term stability or slight weakness, but cautioned that high port stocks and anticipated January capacity increases would constrain any recovery.

Coal stocks at major Bohai-rim ports remained high, exceeding last year's levels by over 10%. On December 29, stocks at Qinhuangdao, Caofeidian, Jingtang, and Huanghua ports stood at 28.81 million tonnes, marking a moderate decrease of 4.58% from the week-ago level.

This destocking was partly driven by a further decline in rail coal inflows from production areas due to storage constraints, coupled with increased seasonal consumption at some coastal power plants, drove this destocking.

As such, the market's wait-and-see mood persisted, with many eyeing a potential floor as prices fell to around the level of long-term contract prices. Some foresaw that further decline may hinder the fulfillment of contracts, raising the likelihood of possible government interventions.

Import prices mixed

In the seaborne import market, prices of the most-liquid Indonesian 3,800 Kcal/kg NAR coal were relatively firm, as lower freight rates and a stronger yuan offset firm offers from miners, driving more spot interests.

Sources reported that inquiries for this grade have picked up since late last week. FOB offers for this material stood at $47.5-$48/t.

High-CV grades continued to be weak, due to ample availability and muted utility needs. Australian 5,500 Kcal/kg NAR coal was trading around 660 yuan/t with VAT at southern ports through utility tenders, netting back to around $68.9/t FOB on a Capesize basis.

On December 29, the CCI Index for Indonesian 3,800 Kcal/kg NAR coal rebounded by $0.5/t from late last week to $45/t FOB, while the index for Australian 5,500 Kcal/kg NAR coal fell $0.5/t to $84.5/t CFR.