Downward correction risks loomed in China's northern port thermal coal market, as recent intensive supply guarantee policies, the approaching end of autumn maintenance on the Daqin railway, and persistently weak spot demand emboldened more traders to sell into strength.

The policy push has reinforced expectations of a gradual recovery in domestic coal supply, with mines expected to resume operations and ramp up output within approved capacity limits. Meanwhile, the Daqin railway, a key artery for transporting coal from major producing regions to northern ports, is scheduled to complete its autumn maintenance on October 26 or earlier, potentially improving rail deliveries and replenishment at portside markets.

However, the pace of supply recovery remains uncertain, as some mines have postponed their resumption schedules and current supply tightness has yet to fully ease.

Sources said overall selling interest grew further at the Bohai rim ports, with offers for 0.8%-sulfur 5,000 Kcal/kg NAR coal widely heard at around 5 yuan/t below the CCI 5000 index, while lower-sulfur cargoes were offered at an index-parity.

Obvious decline in tender-awarded prices by utilities along the Yangtze River also weighed on market sentiment. An awarded cargo translated to roughly 910 yuan/t FOB northern ports with VAT for high-sulfur 5,000 Kcal/kg NAR cargoes. Some traders have become slightly more eager to offload stocks, potentially leading to more price cuts at northern ports.

High-CV 5,500 Kcal/kg NAR coal with lower sulfur content was still offered at about 1,040 yuan/t, but trades were mostly made by rigid-demand buyers; lower-CV coal offers faced more selling pressure due to increased availability from Inner Mongolia. While a 4,500 Kcal/kg NAR cargo changed hands around 837 yuan/t in isolated transactions on delivery to designated port area, several small-sized traders were reportedly willing to sell 1%-sulfur cargos as low as 820 yuan/t.

A leading mining group's downward adjustments in its third-party coal prices and spreading price reductions at production areas also posed pressure on the northern port market.

"There are offers but no buyers, leaving cargoes hard to move," said one northeastern China-based trader source. "Costs are coming down with mine prices and some grades see narrower losses in delivering to northern ports, so people are too worried about risk to build inventories around the price turning point."

Still, participants widely expected any pullback to be shallow given winter restocking needs, elevated replacement costs and still low stocks at major northern ports.

"Low-priced material is still hard to find," said an Inner Mongolia-based trader source. "Delivered prices remain inverted against port prices even after mine-mouth price cuts, which should discourage any dumping." One Shanxi-based trader source added that nobody wanted to sell much before month-end.

Coal consumption at power plants remained on their seasonal downward track, yet some inland power plants holding obviously lower inventories than their year-ago levels may still need to build stocks.

Participants said the depth of the pullback would hinge on how aggressively traders take profit and how quickly buying emerges, with the pace of mine resumptions and the Daqin line's return to normal throughput the key variables to track.

"Some mines keep pushing back their resumption schedules and the supply gap has narrowed but not disappeared, so winter restocking should still give prices another chance to rise," said one eastern China-based trader source.

On October 23, Sxcoal's CCI index for domestic 5,500 Kcal/kg NAR coal at Qinhuangdao port stood at 1,040 yuan/t FOB, unchanged for two consecutive days. The index for 5,000 Kcal/kg NAR coal stayed unchanged at 937 yuan/t and 4,500 Kcal/kg NAR coal flat at 837 yuan/t.

Import market sees tender bids soften

In the seaborne import market, tender activity remained inactive, and bid levels slipped moderately, even though FOB offers from overseas miners were held broadly firm.

A southern utility in China declined to award Australian 5,500 Kcal/kg NAR coal offered at 1,045 yuan/t, CFR South China with VAT, while Indonesian 3,800 Kcal/kg NAR coal was bid at 703-704 yuan/t on the same basis.

Sources said utilities were slowing procurement on expectations of rising domestic supply and remained resistant to high prices, yet few dared to bid materially lower given thin cargo availability and firm freight.

China Huaneng Group floated a tender on October 22, seeking only 10 cargoes of seaborne imported low-CV thermal coal totaling 629,000 tonnes. The volume significantly reduced from the earlier two sessions, at 1.13 million and 1.55 million tonnes.

However, sources cited ongoing supply strains as key factors preventing prices from decline markedly. Indonesian supply showed no immediate improvement despite recent rains, with river water levels needing time to recover and any meaningful increase in export volumes unlikely before December. Australian loadings faced delays of more than a week at certain ports due to aging equipment maintenance.

Overseas offers stayed resilient, with Indonesian 3,800 Kcal/kg NAR coal offered around $82/t FOB and transactions reported at $81-81.5/t, and Australian 5,500 Kcal/kg NAR coal quoted at $116-116.5/t FOB, or about $2.5/t above the index.

"The import market can't be viewed too bearishly, given not much improvement in supply and resilient international demand," said one Fujian-based trader source. He said coal inventories at southern receiving ports fell to a comparatively low level and some utilities still need to secure stocks, making near-term price declines unlikely to be significant.

On October 23, the CCI index for Indonesian 3,800 Kcal/kg NAR coal stayed unchanged at $80.5/t FOB and $93.5/t CFR South China port. The index for Australian 5,500 Kcal/kg NAR coal was also flat at $139/t CFR.