China's northern port thermal coal prices moved into a narrow and firmer range on November 3, as shrinking low-priced supply and tight low-sulfur availability prompted sellers to hold their offers, while fragmented utility demand and expectations of stronger supply guarantees capped any significant gains.

Some participants increasingly discussed a possible modest rebound later this month, but recovering mine supply and restrained procurement kept prices from returning to earlier highs.

At northern ports, the market witnessed slightly firmer sentiment for lower-CV grades, which had been under more downside pressure compared with other mainstream grades last week due to comparatively higher availability.

A 30,000-tonne 4,500 Kcal/kg NAR coal cargo with 0.6% sulfur was heard to have changed hands at a 3 yuan/t premium to the CCI 4500 index, while a northern China-based trader source said sellers were no longer willing to sell below 820 yuan/t, FOB with VAT as more vessels were heard to be arranged to arrive next week.

High-CV coal appeared to be finding some support, with 5,500 Kcal/kg NAR material offered largely above 1,010 yuan/t. Some unblended 0.6%-sulfur Shanxi coal was quoted at parity with the weekly average of CCI 5500 index. Participants suggested that further downside could be limited in the near term after recent declines.

For 5,000 Kcal/kg NAR coal, prevailing offers clustered around 900-920 yuan/t. Offers for material with 0.6% sulfur were heard near 920 yuan/t against counterbids of 905-910 yuan/t, while unblended low-sulfur resources were described as scarce and some Ordos supplies were quoted above 915 yuan/t.

A northern China-based participant planned to buy 5,000 Kcal/kg NAR coal with 0.8% sulfur around 910 yuan/t, partly to deliver his annual throughput target at Jingtang port to waive storage fees.

Not every seller was ready to hold inventory in anticipation of a rebound. A Hebei-based trader reported selling 5,000 Kcal/kg NAR coal with 1% sulfur at a 6 yuan/t discount to the CCI 5000 index, citing weak underlying demand and a desire to recycle capital rather than speculate on further gains.

Mine-mouth prices were mixed and showed signs of losing upward momentum, while non-power demand provided only isolated support. A Qinhuangdao-based trader source said that a concerted utility restocking effort would still be needed to generate a meaningful advance, especially as mine supply was gradually recovering and the policy focus on ensuring adequate supply made speculative buyers more cautious.

Some participants expected stable to slightly firmer prices around mid-November but the scope for gains would depend on actual utility procurement, and the forward market in December would remain vulnerable once seasonal restocking fades.

On November 3, Sxcoal's CCI index for domestic 5,500 Kcal/kg NAR coal traded at northern ports stood at 1,013 yuan/t FOB with VAT, down 2 yuan/t day on day and marking the seventh day of correction. The index for 5,000 Kcal/kg NAR coal fell 2 yuan/t day on day to 909 yuan/t, while 4,500 Kcal/kg NAR coal dropped 2 yuan/t to 804 yuan/t.

Import market stays firm

Imported coal followed a firmer pattern as increased utility tenders, short covering and opportunistic buying lifted prices, although utility acceptance of higher prices remained limited.

Indonesian 3,800 Kcal/kg NAR coal was offered firm at $82/t FOB, with sources reporting limited availability at $80/t. Panamax freight rate from Kalimantan to South China was heard around $11-11.5/t.

Some Australian 5,500 Kcal/kg NAR coal offers were heard at 1,030 yuan/t or so, CFR South China with VAT, a level that utilities may not be immediately accepting given their buying levels around 1,020 yuan/t late last week.

The freight rate from Australia to South China was heard at high levels of between $21-21.5/t for Panamax vessels.

A trader source in southeastern China said utilities showed little willingness to chase cargoes, suggesting limited upside.

On November 3, the CCI index for Indonesian 3,800 Kcal/kg NAR coal rebounded by $0.3/t from late last week to $79.5/t FOB and $92/t CFR South China port. The index for Australian 5,500 Kcal/kg NAR coal also gained by the same to $136.5/t CFR.