China's thermal coal market maintained a bullish tone at northern transfer ports post-Spring Festival holiday, with traders raising offers amid expectations of improved demand due to tight imports from top supplier Indonesia.

Offers of 4,500 Kcal/kg NAR coal were largely heard at a range of 560-570 yuan/t FOB with VAT, up by 5-10 yuan/t compared with the pre-holiday levels. Some premium low-sulfur supplies even reached as high as 590 yuan/t, driven by inquiries from some buyers seeking domestic alternatives to hedge rising supply risks for overseas cargoes.

Low availability of Indonesian coal, caused partly by some miners halting spot exports in response to still-pending RKAB approvals and potential cuts for their 2026 production quotas, significantly pushed up prices of 3,800 Kcal/kg NAR coal, the most popular grade for coastal power utilities. This further heightened the competitiveness of China's domestic 4,500 Kcal/kg NAR coal.

Sxcoal's estimate on February 24 showed that domestic 4,500 Kcal/kg NAR coal enjoyed an advantage of 17.26 yuan/t compared to Indonesian 3,800 Kcal/kg NAR coal, on a delivered-to-South China and CV-converted basis. That marked a further expansion from around 13 yuan/t spread pre-holiday.

The price edge even outpaced last year's level. A loss of seaborne coal price edge from late February to early June last year prompted Chinese end users to pivot inwards and shun imports. Customs data showed that China's thermal coal imports from Indonesia during the first half of 2025 slumped by over 15% year on year.

Despite bullish sentiment, middlemen and downstream users remained cautious. Trading activity was slow early after the holiday break, as some buyers adopted a wait-and-see approach due to offers far exceeding their acceptable levels.

Limited accumulation of inventories and still tight availability of some coal grades at major Bohai-rim ports also underpinned port prices. As of early February 25, coal stocks at Qinhuangdao, Caofeidian, Jingtang, and Huanghua ports totaled 23.57 million tonnes, inching down by 1.59% week on week and falling over 13% below the year-ago level, Sxcoal's data showed.

Views were slightly divided. While some sources expected prices to grind further higher along with the ongoing import hurdles, some warned that domestic production ramp-up and upcoming demand off-season may cap the overall upward room.

Weak industrial activities greatly increased the available days of usage for coal stocks at Chinese power plants during the past holiday. As of February 24, stocks at six major Chinese coastal power groups could cover 23.74 days' worth of usage, rising by 6.35 days from the year-ago level. Power plants in some inland provinces could cover averagely 35 days of use as of February 19, well above the year-ago 21 days.

Import prices soar

Imported thermal coal prices rose rapidly to a level that Chinese buyers were hesitant to engage. Offers of Indonesian 3,800 Kcal/kg NAR coal were heard at $59-60/t FOB for Panamax vessels, while Chinese traders and end users were only willing to buy at $57/t or so.

Mid-CV grades were likewise shortly supplied, with sporadic offers heard exceeding the benchmark index by $8-10/t.

Indonesian miners have been cautiously producing and supplying only measured volumes, or even halting spot supplies to the export market, because their submitted RKAB plans have yet to be approved by the government. The ongoing Ramadan also reduced mining operations and supplies to the market.

Meanwhile, some Indonesian domestic power plants are reportedly experiencing coal shortages, potentially adding pressure to the export market.

The Association of Indonesian Private Electricity Producers said that the coal crisis has actually occurred since the end of 2025, but it is currently getting worse because the 2026 RKAB for coal has not been finalized. If the government only issues the RKAB at the end of March, suppliers could stop sending coal to independent power producers (IPPs), it said. Almost 50% of electricity in the country is contributed by IPPs.

Imported coal from other supplying nations, like Australia and Russia, also gained traction. Offers of Australian high-CV 5,500 Kcal/kg NAR coal surged to as high as 830 yuan/t CFR South China with VAT, rising by over 30 yuan/t compared with the pre-holiday levels.