China's domestic thermal coal market remained under downside pressure, as selling pressure intensified at northern ports and buyers held back amid elevated inventories and weak power-sector demand.

Offers of 5,000 Kcal/kg NAR coal were heard ranging 710-720 yuan/t FOB with VAT northern ports, yet trader sources generally reported muted demand. An offer of 0.7%-sulfur same-CV coal at 707 yuan/t, or a 10 yuan/t discount to the CCI 5000 Index, was heard rejected by a major buyer, while a separate source further lowered its prices for Shanxi 0.8%-sulfur same-CV coal to 700 yuan/t to allure buying interests.

"Sentiment is very poor today as downstream users are not taking cargo, increasing the likelihood of further downside," said a Zhejiang-based trader source. "Even low-sulfur 5,500 Kcal/kg NAR coal offered at 815 yuan/t failed to attract interest."

A second Zhejiang-based trader source, who was eager to cash out, slashed a 5,500 Kcal/kg NAR coal offer to 770 yuan/t after multiple rounds of bargaining from a power plant, down from an initial 796 yuan/t.

"Price drops have accelerated this week, but I guess 770 yuan/t may be close to the bottom," he added, noting that utilities may replenish stocks after the national coal trade fair (December 3-5), potentially slowing the decline.

Several traders said rising northern port inventories continued to cap prices, despite expectations of demand support later in the month. Total stocks at Qinhuangdao, Caofeidian, and Jingtang ports climbed to 24.95 million tonnes on December 2, rising 4.05% week on week and 15.99% month on month.

Adding to the gloomy mood, one leading miner continued cutting its selling prices at Huanghua port for third-party coal sourced from production areas by 3-11 yuan/t depending on the coal grades starting from December 2.

Additionally, one source with a power plant in Guangdong flagged concerns of stronger nationwide solar generation and other renewables as a key drag on coal burns, with daytime power loads increasingly met by such clean energy sources.

Some traders noted early signs of a slight pick-up in thermal power load in recent days, though not enough to drive a significant rebound in coal demand.

Import low-CV coal softens further

Imported coal prices drifted lower as liquidity thinned and domestic prices kept falling. Offers of Panamax Indonesian 3,800 Kcal/kg NAR coal for December-loading dropped to as low as $48/t FOB, with some cargoes at $49/t receiving few interests.

"Salable stocks are largely held by traders, and more traders started to undersell," said a Jiangsu-based trader source. "The market is more prone to decline than rise."

In southern China ports, Indonesian 3,800 Kcal/kg NAR coal was heard offered at around 530 yuan/t on a VAT-inclusive ex-stock basis, yet deals were reported closer to only 490 yuan/t. Utilities were seen in no rush to buy amid ample inventories.

Major utilities adopted a more cautious approach, evidenced by a noticeable decrease in tender issuance and cargo commitments. Following a ten-day pause, China Huaneng Group floated a tender again on December 2, looking to buy 1.60 million tonnes of coal in 24 cargoes with delivery in December-January.