Year-end output cuts and weather-induced consumption rises at power plants triggered 5-10 yuan/t gains in thermal coal prices across China's key production areas. Yet, overall moderate demand posted uncertainties to its sustainability.

Of the 90 coal mines surveyed by Sxcoal on December 30, two mines raised prices by an average of 11 yuan/t, while four mines lowered prices by 34.25 yuan/t on average. The remaining 84 mines kept prices stable.

A growing number of mines either fulfilled annual production and sales goals or scheduled maintenance approaching the year-end, curtailing thermal coal availability in some regions. "We have some coal stockpiles now, but plan to sell these volumes next year," a miner in Shaanxi noted. Some downstream buyers hence struggled with securing spot supplies as surrounding mines provided limited resources.

Meanwhile, potential mine shutdowns for New Year's Day further add to expectations of short-term supply contractions, providing a floor for the mine-mouth market.

The supply-side constraint was intersecting with a shift in weather conditions, which helped bolster demand expectations. Multiple waves of cold air are forecast to move southward across central and eastern China in early January next year. This may lower average temperatures in most areas by 1-2 degrees Celsius compared to the recent higher-than-normal period. Furthermore, possibly increased snowfall in northern regions may disrupt coal production at open-pit mines, further favoring coal prices.

Colder weather in northern heating regions would continue lifting coal-fired power needs. Daily coal burns at power plants under six major coastal provinces reached 835,700 tonnes on December 29, up 2.6% on the week and 6.3% from a month ago, Sxcoal data showed. Increased loads slightly boosted end users' restocking interest.

In addition, a leading Chinese miner held third-party coal buy prices for 4,000-5,800 Kcal/kg NAR thermal coal unchanged starting December 29. The group also raised incentives for large-volume supply by 10 yuan/t. some miners viewed this move as indirect price growth, injecting confidence into the market.

Subsequently, portside prices also showed signs of stabilization. Marginal improvements in essential needs, particularly for low-CV grades, capped sustained price declines. Positive signals from northern ports were radiating back to production hubs.

Miners in Inner Mongolia reported relatively steady demand. "Demand has stabilized recently, driven mainly by nearby washing plants supplying power plants based on contracted volumes," a Zhunger-based source confirmed. He maintained offers for washed grades unchanged at 350 yuan/t, ex-washplant with VAT.

Good sales encouraged a few miners to raise offers by 5 yuan/t, with 4,700 Kcal/kg NAR slack coal (S 0.4%) reaching 385 yuan/t, mine-mouth with VAT.

However, some railway station-based traders focused on year-end settlements and exercised caution in purchases given unclear market dynamics. A handful of miners, therefore, experienced slower sales and had to offer minor discounts to boost sales. A miner in Shanxi's Shuozhou cut offers for 5,000 Kcal/kg NAR slack coal (S 0.8%) by 10 yuan/t from a week ago to 440 yuan/t, excl. VAT.

The prevailing view on the long-term trajectory remains cautious. Some participants believe that near-term price rebounds are likely to be capped by enduring loose supply-demand fundamentals post-New Year's Day, as halted mines are anticipated to gradually resume operations after the holiday. Combined with robust production enthusiasm at the start of the new year, overall supply is likely to hover high, putting additional downward pressure.

On December 30, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 555 yuan/t, steady from the previous day; Ordos 5,500 Kcal/kg NAR material was flat at 525 yuan/t. Yulin 5,800 Kcal/kg NAR grade rose 2 yuan/t to 578 yuan/t.