China's coking coal market opened this week with sustained strength, underpinned by constrained production and heightened buying enthusiasm amid coke price rally expectations. Miners largely intended to hold firm on coal offers across major production areas, citing low stockpiles.

On November 3, the CCI index for Shanxi low-sulfur primary coking coal was steady from late last week at 1,600 yuan/t, ex-washplant with VAT. CCI indexes for mid- and high-sulfur primary coking coal stood at 1,420 yuan/t and 1,403 yuan/t, respectively, up 30 yuan/t and 29 yuan/t.

The recovery pace of coking coal supplies remained curtailed on the whole by localized safety and environmental checks or longwall moves. As the year-end draws near, increasing miners are about to meet their annual production targets, avoiding a ramp-up.

A Shanxi-based miner source said they maintained modest producing pace amid continued inspections and well-delivered output targets. Both primary coking and fat coal remained in tight supply in Luliang city, with normal production and smooth offtakes, noted another producer source in the province.

Similarly, an Inner Mongolian-based producer confirmed operation resumption at a few mines, yet the overall supply stayed sluggish.

Several participants pointed out that the central safety inspection teams have arrived in Shanxi, which has yet to make a substantial impact on local production temporarily.

Demand-side optimism accumulated because the expectations of implementing the third coke price hike became stronger. Coke producers and traders alike accelerated their purchasing, with multiple miner sources confirming the prevalence of low inventories and robust forward orders.

A trader source based in Shaanxi reported that end users remained aggressive in coal restocking, with little possibility of a meaningful price decrease till mid-November.

Most coal miners staunchly held their offer prices, backed by smooth shipments and overwhelmed auction results.

"Online transactions are brisk in the spot market, with prices climbing steadily, despite reports that some steel mills in southern Shanxi are preparing for production cuts in the coming days," said a source with a Shanxi-based washing plant.

A series of successful online auctions held in Shanxi on November 3 demonstrated high buyer interest across various coal grades.

Luliang high-sulfur primary coking coal (S 2.8%, A10.5%, GRI 85) was sold at 1,350-1,375 yuan/t for 20,000 tonnes, up 77.5 yuan/t from the average hammer price on October 29, while another deal of 3,000-tonne Luliang low-sulfur cargo (S 0.8%, A10.5%, GRI 85) was traded 65 yuan/t higher than on October 17, Sxcoal learned.

In addition, 900 tonnes of Luliang lean coal (S 1.3%, A 10%, GRI 65) was fully cleared at 1,315 yuan/t, up 45-50 yuan/t from the last auction on October 22.

The import market for Mongolian coking coal also strengthened at China's Ganqimaodu border port, supported by limited cargo availability and sustained buying interest. Bullish traders maintained coal offers at high levels.

The CCI index of Mongolian 5# raw coking coal stood at 1,183 yuan/t on November 3, rising 173 yuan/t in total since early October.