China's northern port thermal coal market showed tentative signs of stabilizing on October 29, with price declines narrowing as inquiries revived for next-week loadings and vessel bookings increased. But some buyers still waited for prices to fall further to near psychological levels before replenishing stocks.

Market sentiment has improved slightly, with some expecting selling pressure to ease toward the end of the week and conditions to settle further next week. An increased number of vessels for loading was also prompting caution among traders, some of whom started to hesitate to offload cargoes amid uncertainty over price direction.

However, relatively abundant low-CV supply and a comfortable stock position at coastal utilities would limit the chance for any immediate price rebound, sources said.

At major Bohai-rim ports, transactions remained selective. Offers for high-CV coal were reported around the weekly average of CCI index, while some lower-sulfur material was offered at a discount of about 5 yuan/t to the weekly average.

A northern China-based trader source confirmed increased inquiries, including for cargoes scheduled to load next week. "Low availability of high-CV coal has rendered prices relatively resilient, while lower-CV grades were still difficult to sell, with supply ample and buyers reluctant to accept offers," he added.

A deal for 5,000 Kcal/kg NAR coal with 1.0% sulfur was heard concluded at 11 yuan/t below the CCI 5000 index, indicating a still low settlement level. Offers for 5,000 Kcal/kg NAR coal with 0.8% sulfur were heard at 915-925 yuan/t, FOB with VAT, while buyer indications were 900-910 yuan/t. Sources reported muted buying interest for 1.2%-sulfur 4,500 Kcal/kg NAR coal even at a 6 yuan/t discount to the average of next-week CCI 4500 index.

Offers of low-sulfur 5,500 Kcal/kg NAR coal were mostly heard at parity to the weekly average of the CCI 5500 index, while trades were at flat to 3-5 yuan/t below next week's average index.

Despite some improvement in inquiries, buyers were still waiting for prices to fall to more attractive levels before replenishing stocks. Several participants said power plant demand remained weak and transactions outside tenders were still limited, while mine prices continued to decline, making a quick price stabilization difficult to establish.

The downside, however, could be limited if demand for winter stockpiling is further released. Some traders said inventories held by intermediate participants were not so high, while selling prices for many grades remained constrained by high costs.

Sxcoal's data showed that coal stocks at Qinhuangdao, Caofeidian, Jingtang, and Huanghua ports continued to drop after a short-lived rebound. As of early October 29, the four ports held 24.38 million tonnes of stocks, down 3.78% week on week.

Sources expected the market to remain volatile later this week and earlier next week, with prices potentially stabilizing around key psychological levels if fresh selling pressure eased and restocking demand returned.

On October 29, Sxcoal's CCI index for domestic 5,500 Kcal/kg NAR coal traded at northern ports stood at 1,021 yuan/t FOB with VAT, down 5 yuan/t day on day and marking the fourth day of correction. The index for 5,000 Kcal/kg NAR coal fell 5 yuan/t day on day to 918 yuan/t, while 4,500 Kcal/kg NAR coal dropped 6 yuan/t to 814 yuan/t, all marking a slightly narrower decline than the previous day.

Import tender declines narrow on firm FOB offers

The seaborne import market also showed signs that the recent decline in tender prices was losing momentum, as firm offers from overseas suppliers and high replacement costs discouraged buyers from pushing bids much lower.

Indonesian 3,800 Kcal/kg NAR coal was generally offered at around $81-82/t FOB, although some prompt cargoes were available at lower levels. Utilities' indicative buying levels hovered at $78-79/t.

Sources said some power plants only placed small-volume orders and were rejecting some bids as they tried to push prices lower. Coal consumption at power plants remained on their seasonal downtrend, with a shift likely around mid-November, historical data showed. Their coal inventories were also at seasonal norms, leaving utilities in no hurry to build stocks at high prices.

Participants said traders' discounts on prompt 3,800 Kcal/kg NAR cargoes largely reflected the need to clear amid concerns of possible carry-over effect from the ongoing domestic price pullback after notching over three-year highs, rather than a broad weakening in overseas offers.

Some sources also attributed the weakness to a structural overhang of prompt 3,400 Kcal/kg NAR cargoes, which prompted some traders to bid lower through tenders and dragged down overall bidding levels for lower-CV grades.

Indonesian domestic demand and purchases by India and Southeast Asian users remained supportive, while constrained export supply under still tight production quotas helped underpin prices.

On the high-CV segment, bids to tenders for Australian 5,500 Kcal/kg NAR coal were 1,010-1,015 yuan/t, CFR South China with VAT, below some suppliers' reported replacement costs of roughly 1,030 yuan/t.

Market participants said the gap between tender prices and supplier costs, together with relatively firm seaborne offers, could limit further declines once discounted prompt cargoes are absorbed.

On October 29, the CCI index for Indonesian 3,800 Kcal/kg NAR coal was unchanged day on day at $79/t FOB and $91.5/t CFR South China port. The index for Australian 5,500 Kcal/kg NAR coal was down $0.5/t to $136/t CFR.