Sxcoal Issue 52# | China thermal coal prices in fast fall; coking coal slides
Thermal coal prices dropped at a faster pace at northern Chinese ports, while coking coal prices continued to fall...
The 1st Global Coking Coal Conference would invite industry leaders and experts to delve into the synergies and competition between China and global coking coal markets, analyze technological pathways and market opportunities under green transition pressures, and assess the impacts of geopolitical factors, cost volatility, and trade policies.
Thermal Coal
Portside Market: Portside thermal coal prices dropped at a faster rate, as inventories surged to a historical high. Total stocks hit 33.2 million tonnes at Qinhuangdao, Jingtang, Caofeidian, and Huanghua ports as of May 12, up 5.15% week on week and 37.0% year on year. This increase was partly due to increased rail inflow after the completion of maintenance on the Daqin railway line. Authorities at Qinhuangdao port have taken destocking measures, requiring cargo owners to expedite outward shipments to alleviate storage constraints.
Price Trends: The CCI index for 5,500 Kcal/kg NAR domestic spot coal fell to 640 yuan/t FOB northern China ports on May 9, down 17 yuan/t week on week. The CCI 5500 Import index also declined to $82.5/t CFR southern China ports, a drop of $0.8/t compared with the previous week.
Market Sentiment: Market sentiment remains bearish, with participants expecting further price declines in the near term. This pessimism is fueled by ongoing destocking pressure at ports, high production levels in mining areas, and a seasonal lull in end-user demand. Most miners continued to lower prices last week, although a few mines increased prices modestly after previous steep cuts received better sales.
Import Market: China's import thermal coal market remained subdued, with lukewarm domestic demand and ongoing domestic price declines reducing traders' bidding prices to utility tenders. Chinese buyers preferred Russian mid-CV coal over Indonesian supply due to price advantages, while Australian 5,500 Kcal/kg NAR thermal coal faced reduced competitiveness due to declining domestic prices.
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 to decline last week due to weak downstream demand and increasing pessimism. Market sentiment was further dampened by moderate steel sales and declining steel billet prices, leading coking plants to reduce purchases and maintain low feed coal inventories. Some miners were forced to lower offers by 20-30 yuan/t due to inventory pressure.
Supply and Demand: Supply gradually increased as several coking coal mines that had previously halted or capped production due to underground issues resumed operations. Raw coking coal output at 363 Sxcoal-surveyed mines rose 0.5% week on week to 12.8 million tonnes. However, demand remained subdued, with coking plants prioritizing the digestion of existing feed coal stocks.
Inventory: Inventory levels at mines increased, with raw coking coal stocks at surveyed mines rising 5.5% week on week to 3.42 million tonnes, and washed coal stocks increasing 4.4% to 3.50 million tonnes. The accumulation of stocks at mines added to the downward pressure on prices.
Prices: Coking coal prices in Shanxi declined by 10-30 yuan/t last week. In Inner Mongolia, prices also weakened due to a bearish market outlook and recovering coal supply, with a major miner in Qipanjing reporting a 25-60 yuan/t price reduction for partial auctions. In Shandong, washed gas coal prices temporarily stabilized at around 950 yuan/t.
Mongolian Coal: The daily average customs clearance of Mongolian coal at the Ganqimaodu border port increased to 1,085 trucks over May 5-8, up 381 trucks week on week. However, weakening steel prices and downstream buyers' reluctance to restock led to lower offers for Mongolian 5# raw coal under long-term contracts, falling to about 820-840 yuan/t.
Seaborne Imports: Australian coking coal prices remained high at $190/t FOB, translating to around 1,700 yuan/t ex-stock north China port with VAT, significantly higher than domestic prices. End users were cautious about restocking, resulting in sparse transactions. Spot prices for Australian PMV coking coal at northern ports were stable at around 1,320 yuan/t.
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 market remained broadly stable over the past week, with the CR China Met Coke Price Index (CRMP) unchanged at 134.28 points on May 12. While production held firm and margins improved modestly for coking plants, growing inventories and weakening downstream sentiment suggest that the current stability may be short-lived.
Production side: With improved profit margins, most coking plants maintained high operating rates, with the capacity utilization ticking up by 0.29 percentage point week on week. However, a small number of producers trimmed output slightly, anticipating weaker market conditions ahead.
Port: Market sentiment remained weak at eastern transfer ports in China, with traders preferring to offload cargoes in anticipation of softer prices. Quasi Grade I coke was assessed by Sxcoal at 1,320 yuan/t FOB Rizhao port with VAT, falling 40 yuan/t week on week.
Demand side: Steelmakers cautiously made new purchases amid concerns about steel demand softness and price pressures. Steel prices trended lower last week largely due to weak futures prices, and the transaction of construction steel decreased.
More details in our latest weekly met coke review, incl. our weekly survey on coking plants, market dynamics, etc. »CLICK HERE
The above updates are also available in our newsletter China Coal Weekly, which provides in-depth analysis and commentaries, as well as market highlights in coal and related industries.
Meanwhile, our Weekly EXCEL Supplement keeps you updated on the CCI Thermal and Coking Coal, Met Coke indexes, prices at main production areas and transfer ports, key weekly and monthly statistical data on coal and related industries (production, stocks, import & exports, etc.).
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