Coking coal trading faced increasing pressure in China's main production areas as coke producers and traders reduced participation, despite localized supply disruptions.

Several mines in Luliang, one major coking coal base in Shanxi, halted operations following safety accidents, idling a combined annual capacity of 5.4 million tonnes. Meanwhile, a few other mines in the province have yet to resume production due to ongoing longwall moves.

These supply constraints, however, failed to lift market sentiment. Coke and steel makers remained largely on the sidelines, delaying purchases and digesting earlier higher-priced inventories. Middlemen also reduced buying activity while accelerating offloadings.

In response, a growing number of miners chose to adjust down offers more steeply to spur sales, yet multiple sources reported still tepid appetite from the downstream.

One Shanxi-based miner source confirmed little to no improvement in sales after price reductions. "Some buyers do not consider procurement for coking coal at all, especially as the market is declining," he said, noting a gradual stock accumulation.

Some washing plants were also under pressure to move inventories. "If we don't lower prices, no one's willing to buy," said a source with a Shanxi-based washing plant.

As of November 26, raw coking coal stocks at 363 mines under 138 enterprises contributing to Sxcoal's weekly survey stood at 2.08 million tonnes, the highest level in two months. The volume was up 6.3% week on week and marks a four-week winning streak.

The inventory of washed coking coal at these surveyed mines increased 10.5% from a week ago to 1.65 million tonnes, the highest since end-September, Sxcoal data showed.

Recent softness in online auctions confirmed the extent of market lethargy. Sluggish buying resulted in high unsold rates this week, with most concluded deals at lower prices compared to previous levels.

On November 27, a large miner in Qipanjing of Inner Mongolia started an auction of high-ash fat coal (S 0.8%, A 15%) at 980 yuan/t and traded at 1,000 yuan/t, down 20 yuan/t from November 24, Sxcoal learned. The miner also sold low-sulfur fat coal (S 0.8%, A 12%) 20 yuan/t lower at 1,120 yuan/t, with the starting price of 1,110 yuan/t.

In addition, negotiations regarding mid- to long-term coking coal supply contracts for December and 2026 were still ongoing in China, sources said.

Weak import appetite

The import market reflected the domestic weakness. At China's Ganqimaodu border port, Mongolian coal transactions were muted due to widespread end-user prudence. Mongolian 5# raw coking coal remained weakly priced at some 1,000 yuan/t, ex-stock with VAT, with recent deals ranging 980-1,020 yuan/t, according to sources.

At northern ports, Russian Inagli fat coal was offered at 1,150-1,160 yuan/t, ex-stock with VAT, but actual transaction volumes were thin. A portside trader source remarked that "market sentiment is still bearish" and that even at discounted levels, buyers remain hesitant.

Meanwhile, Australian premium coal lost its price edge compared to the Chinese comparable. The price of Linfen and Changzhi low-sulfur primary coking coal (S 0.5%, G 80-85) in Shanxi was 7.49 yuan/t ($1/t) lower than the similar-quality Australian hard coking coal on a delivered to Tangshan basis, according to Sxcoal calculations.

Prices of forward-delivery Australian premium cargoes were supported in the seaborne market by the limited availability, tighter supply expectations, and a slight pickup in demand from Indian end users.