Thermal coal prices experienced modest pullbacks post-holiday at some mines across China's major producing regions. Yet, the downside risks are cushioned by low inventory pressure and potential El Nino-driven cooling demand.

Of the 90 coal mines surveyed by Sxcoal on May 6, 19 mines raised prices by an average of 16.58 yuan/t, while 11 mines lowered prices by 9.27 yuan/t on average. The remaining 60 kept prices stable.

Before the May Day holiday, brisk restocking from chemical users and portside price rises propelled mine-mouth offers steadily higher. However, coal offtakes slowed at some mines as prices continued to advance and end users completed inventory builds. As such, certain thermal coal grades were traded 10 yuan/t lower than pre-holiday levels.

Meanwhile, a leading mining group decreased third-party coal buy prices for all thermal coal grades starting May 5, injecting caution into the market and capping speculative enthusiasm among traders. This move would also weigh on mine-mouth offers in northern mining regions during the post-holiday week.

"Some producers trimmed offers, largely because earlier rallies outpaced downstream acceptance," a Shanxi-based miner said. As of April 30, major CCI indexes for 5,500-5,800 Kcal/kg NAR coal gained 19-25 yuan/t since April 24, Sxcoal data showed.

In Inner Mongolia's Zhunger, a miner cut offers for 5,800 Kcal/kg NAR raw coal (S 0.2%) by 5 yuan/t to 575 yuan/t, mine-mouth with VAT. "Our prices posted no gains during the holiday and have retreated to the pre-holiday level."

Auction settlements in Shaanxi's Yulin saw steeper declines. A major miner in the region put raw 4,400 Kcal/kg NAR slack coal (S 2.3%) for auction at 435 yuan/t on May 5, mine-mouth with VAT, sliding 20 yuan/t from the last auction.

Nevertheless, sustained declines are seen as unlikely, as the current pullback is regarded as a normal correction after overextended rallies. Some railway station-based traders continued to secure cost-effective coal grades, eroding further downward risks.

Most mines reported thin inventory pressure and kept offers stable. Yulin-origin 5,700 Kcal/kg NAR slack coal (S 0.3%) even gained 5 yuan/t to 600 yuan/t, mine-mouth with VAT, thanks to normal offtakes.

Moreover, with El Nino conditions expected to take hold, sustained high temperatures are likely to push up electricity loads along with surging cooling demand in summer. The National Energy Administration estimated China's peak electricity load to reach 1.58-1.6 TW this summer, and to surpass 1.6 TW if widespread extreme heat prevails.

Against this backdrop, power generators may start pre-summer restocking earlier than in previous years, given relatively low fuel stocks as of late April 2026, thereby favoring mine-mouth thermal coal prices.

On May 6, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 652 yuan/t, mine-mouth with VAT, up 6 yuan/t from the pre-holiday level, while Ordos 5,500 Kcal/kg NAR material dipped 1 yuan/t to 570 yuan/t. Yulin 5,800 Kcal/kg NAR grade rose 4 yuan/t to 636 yuan/t.