China's thermal coal market showed a mixed but generally firm tone on September 29, with imported cargoes gaining support from constrained supply and existing end-user buying interest, while domestic prices at northern ports remained largely stable amid limited pre-holiday activity.

Sentiment in the seaborne thermal coal market grinds higher, with power utilities showing slightly more purchasing interest. This, coupled with largely depleted prompt cargoes following a recent wave of profit-taking and elevated offers from overseas miners, has encouraged some traders to slightly raise their bidding prices, especially for high-CV grades to utility tenders.

Sxcoal's tender tracking data showed bids for Australian 5,500 Kcal/kg NAR coal, with late October to November delivery, were heard ticked up to 994-998 yuan/t, CFR South China with VAT, on September 28, with the lowest bid winning the tender with a netback FOB price of roughly $106.6/t on a Capesize basis.

Despite the increase, overall bids remained below the current delivered costs, a Beijing-based trader source confirmed, citing calculated landed costs of over 1,000 yuan/t and high freight rates at about $22/t.

Offers from overseas sellers for this grade were heard largely above $110/t FOB, while counteroffers from traders were heard at $109/t or so, a level at which miners showed a greater reluctance to sell.

Power plants along the Yangtze River and in eastern provinces have reportedly been absorbing spot high-CV volumes at some southern ports recently, cutting down their need for domestic cargoes loaded from northern ports.

Stocks at Fangcheng port fell to 3.15 million tonnes as of September 24, down by over 14% month on month. Inventories held at Guangzhou port stood at 2.62 million tonnes on the same day, falling by 16.7%, Sxcoal's data showed.

On the lower-CV front, sources said Indonesian 3,800 Kcal/kg NAR coal bids still lagged somewhat in relative strength compared to the high-CV bids. Bids to utility tenders for late September-October-delivering cargoes hovered roughly flat at 661-672 yuan/t, CFR with VAT, with the lowest translating to $76.5/t FOB on a Panamax basis.

Sources said offers from Indonesian miners were firm at $79-80/t FOB. "Indonesian miners stay broadly optimistic over the near-term demand and cautious on the future supply, and thus maintain offers firm," said a Guangdong-based trader source.

Indonesian thermal coal exports in September are tracking toward approximately 35.17 million tonnes, the lowest volume for the month since 2022, according to Kpler's data. The decline may be partly attributed to constrained RKAB production quotas and drought-related disruptions to barge movements out of major mining regions.

Market participants expect only limited additional Indonesian supply to emerge in the fourth quarter, reinforcing the tighter supply outlook.

Given higher forward costs, a cautious supply outlook, and exhausted near-term profit-taking, the market seems poised for a stronger post-holiday performance.

On September 29, the CCI index for Indonesian 3,800 Kcal/kg NAR coal stood unchanged day on day at $76/t FOB and $88/t CFR South China port. The index for Australian 5,500 Kcal/kg NAR coal gained $1/t to $130/t CFR.

N China port market muted

Activity at northern Chinese ports stayed subdued ahead of the National Day holiday, with only scattered just-in-time demand from end users.

Transactions proved difficult to conclude, as buyers sought index-linked discounts while sellers resisted lower outright levels. Sources mostly described the market as quiet, with few fresh offers emerging and many participants preferring to wait until after the holiday before committing additional volume.

Offers for 5,500 Kcal/kg NAR coal held relatively firm around 1,005 yuan/t, although liquidity remained thin. Cargoes of 5,000 Kcal/kg NAR material were widely indicated in the 900-910 yuan/t range, with some deals reported at roughly 3 yuan/t below the CCI 5000 index.

A deal was reported for 4,500 Kcal/kg NAR coal with 1.0% sulfur content near 810 yuan/t, delivered to a designated port area with VAT. A few sellers continued to offer 4,500 Kcal/kg NAR stable in the 810-815 yuan/t band.

Sources expressed the view that prices would prove more likely to rise than fall after the holiday given the expected gradual pace of production recovery due to safety concerns, even as officials called on accelerated production recovery.

At the Yangtze River portside market, offers were reported for 4,500 Kcal/kg NAR at 840-860 yuan/t, 5,000 Kcal/kg NAR at 930-950 yuan/t and 5,500 Kcal/kg NAR at 1,020-1,050 yuan/t, CFR with VAT, yet actual trading interest was limited as most participants preferred to wait and watch.

Power utilities' coal consumption has not been particularly strong recently, and many power plants completed restocking prior to the just-past Mid-Autumn Festival, leaving overall buying interest muted ahead of the National Day holiday, which will be start on October 1.

Market participants generally expect the next directional move to emerge around mid-October, once post-holiday demand patterns become clearer and the impact of any production constraints is better assessed. In the interim, the northern port market is expected to remain range-bound.

On September 29, Sxcoal's CCI index for domestic 5,500 Kcal/kg NAR coal at Qinhuangdao port was unchanged day on day at 991 yuan/t. The index for 5,000 Kcal/kg and 4,500 Kcal/kg NAR coal stood at 893 yuan/t and 805 yuan/t, both flat.