After a slight increase in early days this week, spot thermal coal prices tended to stabilize at northern China ports as the emerging restocking demand before the Chinese New Year failed to impress the market.

On January 6, the benchmark 5,500 Kcal/kg NAR thermal coal was mainly offered around 1,200 yuan/t FOB with VAT at northern ports, while cargoes of 5,000 Kcal/kg and 4,500 Kcal/kg NAR were offered at 1,050 yuan/t and 930 yuan/t, respectively.

Trades were not easy to conclude should buying prices exceed the government price caps, traders said. The central government set the bar at 1,155 yuan/t for the portside 5,500 Kcal/kg NAR grade. Based on this, prices of 5,000 Kcal/kg and 4,500 Kcal/kg NAR cargoes are capped at 1,050 yuan/t and 950 yuan/t, respectively.

An Inner Mongolia-based trader sold a 5,000 Kcal/kg NAR cargo with 0.6% sulfur and 12% ash at 1,065 yuan/t FOB. Still, he felt a thin trading vibe as buyers were reluctant to raise their prices even though they had buying interest.

A Zhejiang-based trader noted an improvement in inquiries, but few translated into deals. He reported an offer for 5,000 Kcal/kg NAR at 1,040 yuan/t. For 5,500 Kcal/kg NAR grade, he said the offers were in a wide range from 1,180 yuan/t to 1,260 yuan/t.

Offers for Shanxi and Shaanxi coals were generally higher than Inner Mongolian coal in the market. This, as explained by a Shanxi-based trader, is because Shanxi coal has lower moisture and is widely sought after by industrial end users, while Shaanxi cargoes usually have additional calorific values, always about 100-200 Kcal/kg NAR higher than their corresponding grades.

The trader offered Shanxi 5,000 Kcal/kg NAR cargoes with 0.6% sulfur at 1,070-1,080 yuan/t FOB and 5,500 Kcal/kg NAR ones at 1,210 yuan/t.

A second Zhejiang-based trader offered Shaanxi 5,500 Kcal/kg NAR at 1,260-1,270 yuan/t, and 5,000 Kcal/kg NAR coal at 1,140-1,150 yuan/t.

Traders expected a small bout of appetites before January 10, which could be the last one before the Chinese Lunar New Year.

"As utilities' daily coal consumption is at such a low level, coal prices will probably not bounce back until factories reopen after the lantern festival," a Tianjin-based trader noted. The lantern festival, which falls on February 5 this year, is typically regarded as the start of industrial resumption from the Lunar New Year holiday.

Coal consumption has become slightly lower since the New Year holiday. As of January 2, the daily coal burning at the six major coastal power groups totaled 799,300 tonnes, down from 825,300 tonnes a week ago. Their stockpiles rose from 14.6 days to 15.1 days' worth of consumption.

By far, the news that China begins to resume coal imports from Australia hasn't affected the Chinese domestic market yet.