China's imported thermal coal market gained momentum across both ultra-low and high-calorific-value cargoes, driven by increased utility tenders amid rebounding consumption and ongoing supply constraints in Indonesia.

Sources said that ultra-low-CV grades such as 3,200-3,400 Kcal/kg NAR resources were trading more actively than the previously favored 3,800 Kcal/kg NAR grade, which traders said lacks competitiveness at current offering levels.

Offers of Indonesian 3,800 Kcal/kg NAR coal moved to $63-64/t FOB, with sellers reluctant to accept bids below $62.5/t, sources said. A deal for Panamax same-CV material was heard to have changed hands at $63/t.

Participants attributed the strength to Indonesian supply tightness. Miners on the ground have low spot availability, with most May-loading volumes already sold. Imported coal stocks held by Chinese traders were largely at low levels.

The combination of remaining RKAB quota approvals for a few mines, robust Indonesian domestic demand, particularly from smelters offering competitive pricing and higher DMO requirements, has constrained export availability, sources said. 

Meanwhile, coal consumption at power plants under six major coastal groups have been climbing to a relatively high level for the same period in several years, while stocks fell to comparatively low levels, resulting in available days of usage falling to a four-year low for same period, data showed.

Chinese utilities have shown improved appetite lately, floating more tenders mainly for May-June delivery. While they have stepped up purchases of long-term contract domestic coal, they have also been picky for competitive spot imported cargoes.

"Bids to a southern utility's latest tender for May-delivery 3,800 Kcal/kg NAR coal were at around 563 yuan/t (CFR South China with VAT), while June-delivery cargoes at 568 yuan/t or so," said one importer source with a state-run mining group.

High-CV cargoes were also scarce in the market, sources said. A tender was reportedly awarded by one utility for Australian 5,500 Kcal/kg NAR coal at 844 yuan/t, CFR South China with VAT, netting back to $89.11/t on a Capesize basis. However, that remained below the FOB offers as high as $92/t.

Some participants also saw additional support from anticipated restocking ahead of the May Day break, helping supporting prices at high levels.

North China port prices rangebound

Northern China ports saw activities slightly warm up, partly owing to improved tender demand, encouraging sellers to maintain firm offers with low availability for low-priced cargoes.

A deal for low-sulfur 4,500 Kcal/kg NAR coal was heard concluded at some 600 yuan/t FOB northern port with VAT. A seller source, who offered 0.6%-sulfur same-CV coal at a slightly higher price of 610 yuan/t, reported muted inquiries from end buyers.

Meanwhile, offers for some 0.8%-sulfur Shanxi 5,000 Kcal/kg NAR coal from a Zhejiang-based trader were heard at a 5 yuan/t premium to the weekly average of the CCI 5000 index or fixed price of 700 yuan/t. A deal from another source for a similar cargo has already been settled at the fixed level.

Cargoes of low-sulfur 5,500 Kcal/kg NAR coal were offered at a slight premium to the corresponding CCI index, yet sellers disclosed that the actual transaction levels remained slightly below the benchmark.

Certain distressed cargoes subject to port evacuation orders were heard at a 5 yuan/t discount to the CCI indices, sources pointed out.

Sellers reported more vessels anchoring and arriving at northern ports, though not entirely due to higher end-user demand. Adverse weather also played a part as it limited shipments and led to vessel pileups.

"Prices can't fall much, but also can't rise for now. They are consolidating within a narrow range," a Hubei-based state-linked trader source said. "Some end users plan to await further clarity until Daqin railway completes maintenance by end-April, anticipating post-Labor Day inventory buildup that could soften offers."

Some traders, however, saw potential upside ahead. "End users didn't stock up earlier, and inventories at some plants need to be further boosted. So any downward corrections will attract purchases, resulting in short-lived corrections and broader upward momentum," a Shanxi-based trader source said.