Sentiment in China's mine-mouth thermal coal market slightly cooled on August 12. Softening demand along with lower temperatures and growing buyer resistance against pricier cargoes forced some miners to trim offers. Yet, a solid floor persisted given safety-driven production curbs and overall minimal coal inventories.

Of the 117 coal mines surveyed by Sxcoal on August 12, 12 mines raised prices by an average of 15.42 yuan/t, while one mine lowered prices by 5 yuan/t. The remaining 104 kept prices stable.

Active summer restocking contributed to successive price hikes across major mining regions since early August. However, downstream buyers became increasingly reluctant to chase higher prices.

In Inner Mongolia's Ordos, some miners reported thinning truck loadings post-rallies, prompting select price cuts, especially in some lower-CV grades, to accelerate sales. Prices for Ordos-sourced 4,500 Kcal/kg NAR slack coal (S 0.8%) dipped by 10 yuan/t to 505 yuan/t, mine-mouth with VAT.

Certain traders, meanwhile, took a more prudent buy approach. As one insider put it, the demand seen in recent weeks was driven more by speculative restocking than by considerable purchases from end users.

In Shaanxi's Yulin, a major miner saw 23,000 tonnes of washed mixed coal clear at a weighted average price of 747.35 yuan/t on August 12, dropping 16 yuan/t from the previous round, indicating fading purchasing appetite among downstream buyers.

Moreover, easing summer heat actually dampened near-term demand outlook. Torrential rain will lash central, northern and eastern China this week, easing lingering heat in these regions. Maximum temperatures in many northern cities dropped to 24-27 degrees Celsius on the same day.

Consequently, daily coal burns at major inland power plants edged lower by over 15% both on the week and compared with the same period last month as of August 10, cushioning the urgency of spot restocking.

Nevertheless, downward pressure on mine-mouth prices was not acute. Sustained supply-side restrictions continued to lend support. In Shanxi, many operating mines capped output due to safety inspections.

"We resumed operations on July 29, with daily output currently at 3,000-4,000 tonnes. Output will remain at this level for the rest of the year, as any increase would breach production quotas. Safety inspections are still on site," a Shuozhou-based miner said.

Similarly, a number of mines still halted or capped production for hidden hazard rectification or capacity controls in Shaanxi and Inner Mongolia, keeping saleable resources limited.

In addition, the ongoing industrial restructuring phases out outdated capacity and halts approvals for mines below certain levels. For instance, new projects with capacity under 1.2 million tonnes per annum in three major coal-producing provinces will no longer be approved, capping future supply increases.

This, together with smooth offtakes to term contract buyers and chemical plants, broadly kept a balance between production and sales at most mines. Inventories hence hovered low, encouraging most miners to hold offers firm.

High-CV coal in Yulin continued to draw truck arrivals, supported by active on-demand restocking from chemical users. Local 5,900 Kcal/kg NAR slack coal (S 0.22%) rose by 10 yuan/t again to 710 yuan/t, mine-mouth with VAT. Ordos-sourced 5,000 Kcal/kg NAR slack coal (S 0.3%) reached 585 yuan/t, up 5 yuan/t, indicating stronger pricing resilience.

"Spot trading activity stays thin, and a few participants are now turning slightly bearish on the outlook for coal prices. However, prices are still more likely to rise than fall in the second half of the year," a miner in Shanxi told Sxcoal. Looking ahead, supply tightness and easing demand are expected to keep the mine-mouth market range-bound in the near term.

On August 12, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 720 yuan/t, mine-mouth with VAT, unchanged on the day, while Ordos 5,500 Kcal/kg NAR material kept flat at 658 yuan/t. Yulin 5,800 Kcal/kg NAR grade rose by 2 yuan/t to 721 yuan/t.