Activity in China's seaborne import thermal coal market cooled slightly after a brief period of heightened buying, as demand failed to keep pace with an uptick in available cargoes. This, coupled with eased domestic prices, prompted some buyers to push back against elevated prices and a diminishing arbitrage eroded by rebounding freight costs.

Indonesian 3,800 Kcal/kg NAR coal was offered at around $62/t FOB for Panamax cargo, with a few trades concluded at $61-62/t last week. "Offers remain resilient, but demand has retreated this week with a lot of cargoes suddenly appearing in the market," a Fujian-based trader said, adding that major buyers are now highly sensitive to price levels.

"We saw a scramble for cargoes last week, driven by market speculation that a major southern utility would accept higher bids. But the reality is that major utilities are all keeping their acceptance prices low," another trader source disclosed.

Additionally, sources reported a rebound in Panamax freight rates from South Kalimantan to South China to around $9.5/t, raising delivered prices to China. This led to further erosion of the price edge for import cargoes relative to China's domestic alternative.

Sxcoal's estimate on March 30 showed that Indonesian 3,800 Kcal/kg NAR coal was priced 3.28 yuan/t higher compared with domestic 4,500 Kcal/kg NAR coal, on a CV-adjusted and delivered-to-South China basis, marking a further widening after the gap narrowed to only around 1 yuan/t late last week.

Some sources reported offers for Indonesian 3,800 Kcal/kg NAR coal to India were heard as low as $59/t FOB or so, though no such levels were heard in China.

Chinese coastal utilities have shifted their focus toward more economical grades, with several showing a preference for lower-CV grades. On March 30, a utility was heard purchasing 3,150-3,200 Kcal/kg NAR coal at prices equivalent to $43.7-44.1/t FOB East Kalimantan for April-delivery laycan.

Some participants tended to lean on the bearish side, expecting Indonesian supply to increase further as RKAB approvals are reportedly to be finalized soon, which could weigh further on prices. Others, however, still see potential upside amid the ongoing geopolitical conflicts and soaring LNG and oil prices, creating a divided outlook for April.

China's domestic market sentiment sours

Northern China port markets presented a more obvious softening trend, with offers edging lower as sentiment turned slightly bearish amid a combination of softening prices at production areas, high port inventories, and measured purchases from end users.

Selling pressure pushed some port traders to lower their offers to increase liquidity potential, though overall price declines remained limited due to high inventory costs and support from firm import prices.

A trader from Inner Mongolia reported that long-term contract shipments remained stable, but spot activity was subdued. "Northern port stocks are still rising, and some end users' stocks at ports also hover at a relatively high range. This inventory pileup is weighing on the market, likely weighing prices down slightly in the near term," the source added.

Offers for 5,000 Kcal/kg NAR coal with 1% sulfur were heard at 670-675 yuan/t FOB northern ports, while lower-sulfur grades were quoted higher but faced similar selling difficulties. One major power utility bought the same grade of coal through a tender on March 30 at a price equivalent to a 10 yuan/t discount to the CCI 5000 index, adding negative trading sentiment in the market.

A seller offered 0.6%-sulfur 4,500 Kcal/kg NAR coal at 590-595 yuan/t FOB, yet inquiries were scarce, while a buyer was heard seeking low-sulfur same-CV grade at up to 595 yuan/t for ex-stock transfer.

"Buyers are waiting for prices to drop before purchasing. But sellers are also reluctant to cut too deeply. We're in a standoff," an Ordos-based trader source described the status.

Some participants expect a modest price correction in the near term, though downside is widely seen as limited. A few inland power utilities are planning tenders around the upcoming April holiday, which could provide certain support.