Thermal coal prices across China's key production regions continued to creep upward on August 25, backed by month-end production reductions and steady downstream restocking. Yet, weakening weather-related power load dampened market sentiment.

Of the 117 coal mines surveyed by Sxcoal on August 25, 15 mines raised prices by an average of 20.27 yuan/t, while two mines lowered prices by 17 yuan/t on average. The remaining 100 kept prices stable.

The domestic thermal coal market garnered sustained support from slow supply recovery. More thermal coal mines halted or capped production after finishing monthly tasks. This, combined with routine equipment maintenance, longwall moves, and intensified safety inspections, notably reduced spot coal supplies.

Sxcoal learned that earlier rainfall had disrupted coal operations at certain mines in Shanxi, causing delivery delays. Constrained availability of spot cargoes kept mine-mouth prices under upward pressure.

On the demand front, the approaching "Golden September" period for the non-power sector unlocked steady raw material needs. Coal chemical plants are expected to raise operating rates next month, translating into firmer purchases of feedstock coal. Some steel mills and metallurgical facilities also made modest restocking, favoring thermal coal offtakes.

Although the 40-day hottest summer period ended on August 23, residual heat persisted. The coming week is expected to bring continued hot weather to the Yangtze River basin, keeping residential electricity consumption from dropping.

Despite minor fluctuations, coal burns at power plants stayed elevated. Daily coal burns at plants under six major coastal power groups reached 954,900 tonnes on August 24, up 0.79% week on week and 3.66% month on month, Sxcoal data showed. Their coal stocks could cover 14.7 days of consumption on average. Some generators had to return to the spot market for essential purchases, providing a floor under mine-mouth prices.

Yet, the lingering heat is forecast to ease. Typhoon Narra is affecting coastal regions in southern China through August 25-26, resulting in heavy rain in localized areas and thereby tempering heat-driven power load in the south.

Meanwhile, the muggy weather in northern China is also set to retreat. Rainfall and a cold air mass starting August 26 are expected to push temperatures in some areas slightly below seasonal norms.

This, combined with recovering hydropower generation in southwestern regions during the rainy season, would reduce thermal power needs and curb large-scale coal purchases. Power plants were largely relying on long-term contract supplies, with spot intakes still restrained.

Overall, the mine-mouth market was locked in a tug-of-war between prolonged supply constraints and fading demand drivers, leaving prices with support but limited room for further gains.

In Inner Mongolia, a Zhunger-based miner raised prices for multiple washed lump and slack grades by 5-10 yuan/t, citing long truck queues. "Prices are less likely to go down in the near term amid decent truck loadings," a local source said.

"Sales are pretty good. Our daily output of 20,000 tonnes is not enough to meet demand," a miner in Ordos told Sxcoal. He held prices for 4,200 Kcal/kg NAR slack coal (S 0.34%) firm at 470 yuan/t, mine-mouth with VAT.

Online auctions continued to perform well in Shaanxi's Yulin. 5,650 Kcal/kg NAR material (S 0.6%) was traded at 774 yuan/t on August 25, up 5 yuan/t from the last auction thanks to robust purchases from chemical plants.

Nevertheless, a few thermal grades saw modest pullbacks due to poor quality or downstream resistance against previously elevated prices.

A Yulin-based miner noted that the market is basically set this month. "September will tell whether the rally can continue," he added.

On August 25, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 726 yuan/t, mine-mouth with VAT, unchanged day on day, while Ordos 5,500 Kcal/kg NAR material rose 3 yuan/t to 691 yuan/t. Yulin 5,800 Kcal/kg NAR grade gained 7 yuan/t to 767 yuan/t.