China's coking coal market opened this week with sustained strength, underpinned by restrained production and heightened buying enthusiasm amid coke price rally expectations.

On November 10, the CCI index for Shanxi low-sulfur primary coking coal was steady from late last week at 1,657 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, both flat from late last week.

Plenty of coke producers launched the fourth round of coke price rise of 50-75 yuan/t right after the third one, further fueling market sentiment.

"We still have stockpiles enough for ten days' consumption or so. It's not a question for the fourth round to be realized given meager profit margins," said one coking plant based in Shanxi.

Another larger coke firm in Shanxi confirmed this, citing steel mills' urged deliveries. "The fourth round of price hikes is expected to be implemented, with coking coal inventories remaining stable. Moving forward, the market will still depend on end-user demand, with a dynamic balancing act and a wait-and-see approach," the firm commented.

However, supply-side disruptions remained in coking coal mines. Sxcoal learned a few mines in Shaanxi and Shanxi faced restraints from longwall face changes, while operations at a few mines in Wuhai of Inner Mongolia were dampened by ongoing environmental checks.

"Nearby coal mines experienced abnormal operations for approximately one and a half months, with minimal to no coal output. It is anticipated that production will resume normal levels by the end of this month," said one coking coal mine source.

Several mine sources contacted by Sxcoal pointed low stocks and enough orders were the main reasons for them to push up prices.

"Supply at our mine in Ordos remains relatively high, with traders and washing plants recently purchasing a considerable amount. The mine has pre-sold coal until the end of the month," one miner reported.

But China's coking coal auction market showed signs of cooling. The total volume listed for auction on November 7 rose slightly to 170,000 tonnes from 162,000 tonnes the previous day. However, the unsold rate surged by 41 percentage points, reaching 50%, signaling a shift in market dynamics.

The average trading premium for the sold lots also dropped significantly, standing at 20.56 yuan/t, down from 57.5 yuan/t the day before. The weakening sentiment can be attributed to reduced daily molten iron production, down to 2.34 million tonnes on the same day, which has dampened demand in the market.