China's northern port thermal coal market opened the week on a firmer footing, supported by falling inventories at Bohai-rim ports and a modest uptick in demand for low- and mid-CV coal. However, tepid interest in high-CV coal continued to act as a drag on the market, capping overall price gains.

The market had embraced positive sentiment around the New Year holiday, partly due to accelerated destocking at major northern ports. Sxcoal's data showed that the combined coal stocks at Qinhuangdao, Caofeidian, Jingtang, and Huanghua ports fell to 26.93 million tonnes as of January 5, marking a 6.55% week-on-week decline and dropping to the lowest since late November, though it remained 7.93% above the year-ago level.

Sources said inquiries were mainly concentrated on 4,500-5,000 Kcal/kg NAR grades, encouraging some sellers to raise prices. Interest in high-CV 5,500 Kcal/kg NAR coal remained thin due to ample supply, with offers broadly flat and actual transactions stagnant.

Offers of 4,500 Kcal/kg NAR coal were heard at a range of 495-510 yuan/t, FOB with VAT northern ports, while trades were heard 4-5 yuan/t above the CCI 4500 Index. Some offers of premium low-sulfur 5,000 Kcal/kg NAR coal were heard at 615-630 yuan/t, with deals reportedly done at 620-626 yuan/t.

Cargoes of 5,500 Kcal/kg NAR coal were mostly offered at 690-710 yuan/t, yet showing limited momentum to go up due to inactive purchases.

On January 5, the CCI Index for 5,500 Kcal/kg NAR coal traded at Qinhuangdao port stood at 687 yuan/t FOB with VAT, rising 3 yuan/t day on day. The Indexes for 5,000 Kcal/kg and 4,500 Kcal/kg NAR coal were 599 yuan/t and 506 yuan/t, rising 4 yuan/t and 5 yuan/t respectively.

Several traders noted that port sellers were reluctant to cut offers aggressively, even as buyers remained largely cautious.

"Power plants are not short of fuel, contributing to thin liquidity in the spot market," one Hebei-based trader source said. "But, low-priced cargoes are also difficult to secure."

Data showed that coal consumption at some inland power plants, which mainly rely on domestic resources, stayed below year-ago levels and only modestly increased month on month driven by seasonal temperature drops.

Despite softer demand, sharp price declines were seen as unlikely in the near term, given the rapid drawdown in port inventories and improved prices at the mine-mouth market.

"At current inventory levels, there is no solid basis for a sharp fall, but the market also lacks momentum for a sustained rally with the absence of robust downstream purchases," a Beijing-based trader source said.

Imported low-CV coal firming up

Imported coal prices edged higher, supported by constrained January supplies from Indonesian miners due to RKAB permit issues, as well as a rebound in international freight rates. Offers of low-CV Indonesian 3,800 Kcal/kg NAR coal ascended to around $49-50/t FOB on a Panamax basis, sources said.

Post-holiday activity remained subdued, but short-covering persisted amid tight prompt supplies. Coastal power plants released February import tenders, with some extending to early March shipments.

Bidding prices to Chinese utility tenders for the 3,800 Kcal/kg NAR grade elevated to above $48/t FOB, according to Sxcoal's tracking data, partly driven by delivered costs as the Panamax freight from South Kalimantan to southern China rose to about $5.5-6/t.

Some participants cautioned that if domestic coal prices retreated again or stagnated, imported coal could face margin pressure or even slip back. "Supply is tight now, and prices are firm, but if domestic prices soften again, import arbitrage for low-CV grade could quickly turn negative," a Guangzhou-based trader said.

Meanwhile, Indonesia has allowed coal miners who are yet to receive approval for 2026 production plans to continue operating at up to 25% of their previously approved 2026 production plans under the three-year mechanism until the end of March. This could help mitigate potential disruptions as companies await approval of their new one-year work plans for this year.

High-CV imported coal also held firm. Australian 5,500 Kcal/kg NAR cargoes were heard trading at 685-700 yuan/t CFR South China with VAT, with some buyers reporting growing difficulties securing cargoes at 680 yuan/t and below.