Thermal coal prices across China's key production areas continued to edge higher on November 4, lifted by winter heating demand and improved purchases from the non-power sector. However, market caution persisted over high-priced cargoes.

Of the 117 coal mines surveyed by Sxcoal on November 4, 13 mines raised prices by an average of 11.92 yuan/t, while one mine lowered prices by 32 yuan/t. The remaining 103 kept prices stable.

Several participants attributed recent modest price upticks to constrained supplies and resilient essential demand. While some mines were restarting operations after maintenance, overall output was ramping up slowly, keeping spot availability for select premium thermal coal grades limited.

On the demand side, chemical plants and metallurgical buyers posted increased interest in certain thermal coal grades that had retreated notably. End users maintained steady purchases based on long-term contracts. This, combined with gradually rising restocking to meet heating demand, further smoothed mine sales.

Weather forecasts are further bolstering end-user stockpiling. Frequent cold air is expected in the coming days. Over the next three days, northeastern and northern China are forecast to experience temperature drops of 4-8 degrees Celsius, with local falls exceeding 10 degrees Celsius accompanied by strong winds. A further cold wave is set to move from northwestern to southeastern China over November 7-9, pushing temperatures in most regions to new lows for the second half of the year.

Coal inventories at major inland power plants fell by 10.6% year on year to 86.32 million tonnes as of November 2, data showed. Daily coal burns at these plants reached nearly 3.4 million tonnes recently, rising 24.9% on the month and 8.9% on the year. Some generators hence sourced some cost-effective grades as needed.

As a result, miners across key thermal hubs mostly reported increasing truck loadings, thereby holding offers relatively firm. "Demand was good over the past few days, with more coal trucks on the road. Freight rates also ticked up, further supporting mine-mouth offers," according to a miner in Inner Mongolia's Zhunger. An Ordos-based miner also lifted prices for washed 5,000 Kcal/kg NAR material (S 0.25%) by 5 yuan/t to 697 yuan/t, ex-washplant with VAT.

Normal offtakes and minimal coal inventories encouraged several miners in Shaanxi's Yulin to raise offers by 10-20 yuan/t. Washed 6,100 Kcal/kg NAR coal (S 0.5%) settled at 910 yuan/t, ex-washplant with VAT, up 20 yuan/t from the last deal. Local producers were positive about the near-term market in anticipation of stable portside prices.

However, a more cautious cap read such upward adjustments as a modest recovery following prior slumps rather than a start of a broader uptrend, as overall demand stayed moderate. Some producers noted that power plants showed limited appetite for spot purchases and kept pressing buy prices down despite the upcoming peak winter.

Meanwhile, partial railway station-based traders became less active in shipments following earlier price growth, and most preferred to wait for a leading Chinese miner's next price signal. A few miners quoting higher offers had to cut prices again by 5-10 yuan/t amid slow offtakes.

Overall, mine-mouth prices are likely to be caught between bullish expectations of winter stockpiling and limited improvement in actual demand.

On November 4, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 852 yuan/t, mine-mouth with VAT, unchanged day on day, while Ordos 5,500 Kcal/kg NAR material rose 2 yuan/t to 818 yuan/t. Yulin 5,800 Kcal/kg NAR grade gained 1 yuan/t to 876 yuan/t.