China's domestic thermal coal prices continued to drop as sellers began to speed up sales after the nation's top miner lowered its purchase prices. Fears that coal stockpiles may catch fire at ports also stoked the bearish sentiment.

On March 12, the portside market kept focusing on 5,000 Kcal/kg NAR grade. Prices for low sulfur, low ash supplies were reported at 880-900 yuan/t (FOB with VAT) in the morning, but dropped later in the day to 855 yuan/t.  

Some buyers with urgent needs were willing to pay higher prices to secure supply, while most other buyers were reluctant to pay above 850 yuan/t.

Several deals were made with prices around 875 yuan/t FOB, a Shanxi-based trader noted. "Many buyers were making phone inquiries hoping to buy at prices below 850 yuan/t."

One power plant secured a contract for high-quality 5,000 Kcal/kg NAR coal at 855 yuan/t FOB, reported an Inner Mongolia-based trader. The trader was asked for 70,000 tonnes of Inner Mongolia coal with prices lower than 850 yuan/t.

The overall sentiment in the market remained bearish. Some sellers were forced to accept lower prices. The situation at Caofeidian was tense, with some coal stockpiles catching fire and sellers trying to clear out.

Trades fared not well for 4,500 Kcal/kg NAR coal, with offer prices down to 760-765 yuan/t. Benchmark 5,500 Kcal/kg NAR coal got few offers/bids. A portside trader reported the cost of high-CV grade was hefty and traders made it into 5,000 Kcal/kg NAR grade to sell.

Cost support weakened as miners started cutting their selling prices in the wake of top miner's latest price adjustment. CHN Energy, or Shenhua, again revised down its purchase prices of coal it buys from other coal mines over April 11-18. This new pricing has furthered industry concerns about the potential downturn in the spot market.

Feedbacks from mines in Shanxi and Inner Mongolia highlighted price declines in a range of 20-60 yuan/t, citing growing stockpile pressure and pessimistic view on the near-term demand.  

Demand from non-power end users remained weak. Except those with pressing need, few cement producers took the initiative to buy in the spot market at present. Their lack of interest in raw materials lies to the underperformed cement industry that has been long plagued by capacity surplus.

The Zhejiang Cement Association issued a notice on April 12 instructing all cement clinker producers in the province to suspend operation for 12 days between April and May. Producers were asked to submit their shutdown plans by April 14.

On April 12, 5,500 Kcal/kg NAR thermal coal traded at Qinhuangdao port was assessed at 1,015 yuan/t FOB with VAT, down 15 yuan/t day on day. The 5,000 Kcal/kg NAR grade was at 871 yuan/t, down 6 yuan/t, while the 4,500 Kcal/kg NAR grade was at 760 yuan/t, 10 yuan/t off from a day ago.