Sxcoal Issue 42# | China coal market opens 2025 with bearish outlook
China's thermal coal market further rebounded last week; coking coal was still on the downside, while met coke stayed relatively stable.
China's thermal coal prices are expected to remain stable or see slight increases at northern ports; the seaborne import activity may improve, though significant price recovery remains unlikely. In contrast, the coking coal market will likely face continued downward pressure due to anticipated coke price cuts by steelmakers, further compounded by weak coke demand resulting from steel production curbs and an ongoing oversupply. This oversupply, combined with falling coking coal prices, will further weaken support for the coke market.
Thermal Coal
Portside Market: Portside thermal coal prices in China further rebounded last week, driven by increased month-end purchases and a structural shortage at northern ports. On January 1, the combined coal stocks at Qinhuangdao, Jingtang, and Caofeidian ports dropped 3.66% decline from the previous week and 15.26% from a month earlier. This was mainly due to low rail coal inflows compared to outbound shipments.
Price Trends: The Fenwei CCI index for 5,500 Kcal/kg NAR domestic spot coal was 770 yuan/t FOB northern China ports with VAT on January 3, an increase of 5 yuan/t week on week. Fenwei CCI 5500 Import index stood stable at $92.7/t CFR southern China port.
Market Sentiment: Portside traders held firm on prices due to reduced inventory pressure and short supply of low-sulfur coals. However, overall transactions did not significantly improve due to weak buying appetite from power plants.
Import Market: Imported thermal coal prices stabilized, supported by rebounding domestic prices and continued tendering from major Chinese utilities. Despite some offers from Indonesia, transactions lacked momentum as power plants were not in a hurry to restock and preferred to buy at lower prices. Bids for Chinese power utilities' tendering for 3,800 Kcal/kg NAR coal translated to $50-52.3/t FOB East Kalimantan.
More details in our latest weekly thermal coal review, incl. our weekly survey on thermal coal mines, market changes and updates on coal consumption in domestream sectors. »CLICK HERE
Coking Coal
Market Overview: China's coking coal market continued its downward trend last week. Prices dropped notably due to stock pressure, with miners reducing offers to attract buyers. The online auction market saw fewer failures, but settlements remained low.
Supply and Demand: Production at coking coal mines slowed down as many mines suspended operations after completing their annual targets. Coking plants were not actively restocking, with only a few making purchases based on immediate needs. The Chinese New Year's approach led to some stockpiling demand, but volumes were limited.
Inventory: Inventory levels at coking plants increased slightly, with stocks sufficient for 8.4 days of usage as of January 1. Stock levels at Sxcoal-surveyed mines also rose, with raw coking coal stocks reaching 3.51 million tonnes and washed coal stocks increasing to 2.79 million tonnes.
Prices: Prices for various grades of coking coal declined. Low-sulfur primary coking coal in Linfen dropped to 1,430 yuan/t, with cumulative declines since mid-October reaching 370 yuan/t. However, trading activity remained limited due to cautious procurement by the downstream sector.
Mongolian Coal: Imports from Mongolia faced challenges, with Ganqimaodu port experiencing a reduction in inventories due to lower import volumes. Buyers mainly made on-demand purchases only. The prevailing prices for Mongolian 5# coal fell 20 yuan/t on the week at the port.
Seaborne Imports: The seaborne market, particularly Australian coal, saw a price increase due to India's coke import quota for the first half of 2025. However, the overall market remained cautious, limiting trading activities. Australian hard coking coal rebounded to $203.4/t FOB, translating to about 1,808 yuan/t CFR China with VAT, which is higher than domestic prices.
More details in our latest weekly coking coal review, incl. our weekly survey on coking coal mines, market dynamics, etc. »CLICK HERE
Met Coke
Market Overview: China's metallurgical coke prices remained relatively stable last week, following the full implementation of the fifth price cut. However, there are lingering concerns about potential downward pressure due to decreased demand from steel mills and falling feed coal prices.
Production side: Despite further price cut, coke-making profits only slightly declined as coking coal miners further reduced prices due to ample supply and stocks. Some coke producers slightly increased production following eased regional environmental inspections, while others scaled back due to unprofitable operations or energy consumption issues. The capacity utilization rate of Sxcoal-surveyed coking plants rose by 0.21 percentage points.
Port: Market sentiment at eastern transfer ports remained pessimistic due to range-bound futures prices and a lack of cost and demand support in the spot coke market. Transactions were limited by low asking prices and scarce cargo availability.
Demand side: Steel prices generally trended downward last week due to weak supply-demand fundamentals. Domestic iron ore prices fluctuated, while imported iron ore prices rose. Steel scrap prices also declined.
More details in our latest weekly met coke review, incl. our weekly survey on coking plants, market dynamics, etc. »CLICK HERE