Persistent production curbs and resilient essential purchases continued to bolster thermal coal prices across China's key production hubs on August 18, though some participants grew cautious amid potential weakening of demand.

Of the 117 coal mines surveyed by Sxcoal on August 18, 13 mines raised prices by an average of 14.15 yuan/t, while two mines lowered prices by 3.5 yuan/t on average. The remaining 102 kept prices stable.

The mine-mouth thermal coal market has traded in a broadly firmer range since early August despite brief stabilization, fueled by tightening supply that repeatedly lifted sentiment among miners.

A gas accident in Hunan added urgency to already strict safety inspections, prompting authorities in key mining provinces to ramp up enforcement. Sxcoal learned that a five-month special rectification campaign in Inner Mongolia's Xilingol League is restricting local output. Operations at a few mines in Shaanxi's Yulin were halted for an extended period due to underground equipment failure or longwall moves; washing plants in Yulin have been shut down for comprehensive safety overhauls and are unlikely to reopen before mid-September.

Although some private mines in Shanxi gradually resumed but contributed only marginal increase in supply volumes. Operating mines mostly ran at low capacity to avoid overproduction. These measures notably curtailed available supply.

Weather-driven power demand persisted despite the approaching end of the peak summer. A three-day forecast predicts lingering high temperatures across parts of northwestern, central, eastern, and southern China. Even with temperatures at 33°C, high humidity will push the heat index past the 35°C threshold, sustaining high air-conditioning demand.

Meanwhile, the heatwave is expected to linger even after the Limit of Heat solar term on August 23 and the end of the hottest summer days on August 24, as the subtropical high continues to dominate.

The sustained warmth kept power plants' coal consumption high, thereby underpinning their restocking demand as needed. Despite minor erosion, daily coal burns at power plants under six major coastal power groups reached 947,400 tonnes on August 17, up 2.74% on the week and 10.03% on the month, Sxcoal data showed.

Non-power sectors remained active buyers. Rising global crude oil prices sustained healthy profits at coal-to-chemical plants, keeping them running at full capacity and securing steady raw materials demand. Certain metallurgical and chemical plants also moved to build stocks ahead of scheduled maintenance. Some residential buyers also started procurement for winter storage.

Consequently, most producers achieved a production-sales balance and held low inventories, triggering 10-20 yuan/t price growth. A Yulin-based miner reported steady inquiries and busy truck loadings, raising prices for 5,700 Kcal/kg NAR slack coal (S 0.6%) by 11 yuan/t to 760 yuan/t on August 18, mine-mouth with VAT, while mixed lump grades gained 13 yuan/t to 781 yuan/t.

Certain lump grades in Inner Mongolia's Ordos experienced brisk purchases from chemical plants, driving up offers for washed 6,100 Kcal/kg NAR lump coal to 750 yuan/t, ex-washplant with VAT. "Demand has been robust in recent days, evidenced by long truck queues at mines," a local source said, adding that prices are unlikely to go down in the near term.

In Shanxi's Datong, 5,300 Kcal/kg NAR slack coal (S 0.6%) was traded at 741 yuan/t, up 31 yuan/t from the last auction, with smooth sales observed post-rallies.

However, some insiders turned cautious in anticipation of fading seasonal demand. Power load and thermal coal consumption are expected to gradually peak and retreat after the dog days.

Power plants, holding relatively ample inventories and relying primarily on long-term contract coal, showed muted appetite for spot cargoes at elevated prices. Meanwhile, traders pushed back against high offers following stable third-party coal buy prices from a leading Chinese miner and stagnant portside prices, potentially tempering market optimism.

Looking ahead, most miners anticipate limited downside in the short run, as persistent supply constraints continue to lend support, while power generation demand has yet to weaken materially.

On August 18, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 724 yuan/t, mine-mouth with VAT, up 2 yuan/t on the day, while Ordos 5,500 Kcal/kg NAR material rose 3 yuan/t to 673 yuan/t. Yulin 5,800 Kcal/kg NAR grade gained 5 yuan/t to 745 yuan/t.