Thermal coal prices across China's main production hubs largely steadied on May 14, leaving minor adjustments in both directions affected by the tug-of-war between bullish sentiment and cooling demand.

Though a few thermal coal mines capped output due to underground issues or maintenance, the overall supply remained relatively stable. According to Sxcoal's latest weekly survey covering 160 thermal coal mines in Shanxi, Shaanxi, and Inner Mongolia, the capacity utilization of surveyed mines averaged 91.45% in the week ended May 13, down 0.3 percentage point from a week prior.

Comparably ample supply, combined with cumulative weight of successive mine-mouth price rises, further soured downstream buying appetite. Spot trading liquidity languished amid downstream buyers' fear of buying at the peak.

While several miners continued to move coal smoothly, producers that pushed prices extremely high were experiencing diminished truck arrivals and stock builds, which forced minor corrections.

The weakness was more apparent in Inner Mongolia. A Zhunger-sourced miner lowered prices for 4,500 Kcal/kg NAR washed coal (S 0.8%) by 10 yuan/t to 430 yuan/t, ex-washplant with VAT, citing consistently subdued demand.

Meanwhile, market sentiment cooled further given the upcoming cooling weather. Starting May 15, a broader rain band is forecast to sweep across southern and northern provinces, and a cold air mass is also expected. Hot weather in the north will ease further, with maximum temperatures in some areas dropping to just above 20 degrees Celsius.

Daily coal burns at power plants under six major coastal power groups reached 778,200 tonnes on May 14, rising 0.4% on the day and 7.6% week on week, Sxcoal data showed. Yet, generators exercised caution in further restocking given the short-lived heatwaves and elevated prices.

"This round of price gains lacks the support of actual transactions, and the sustainability is highly questionable," one market source remarked, adding that the portside trading was also locked in a stalemate, further weighing on mine sales.

Nevertheless, some miners still managed to keep offers firm. Coal inventories at Sxcoal-surveyed mines reached 4.01 million tonnes on May 13, up 0.09% from a week ago. Stocks at major mines were still low overall, leaving little pressure to cut prices aggressively.

As one miner in Shanxi put it, "demand is decent, and we have almost zero stockpiles", with his offers for 5,900 Kcal/kg NAR raw coal (S 0.5%) reaching 858 yuan/t, mine-mouth with VAT.

A Shuozhou-based miner also reported notable gains in online auctions. Some 2,800 Kcal/kg NAR raw coal (S 2.1%) was heard traded at 333 yuan/t, mine-mouth with VAT, backed by robust spot offtakes. "Coal prices are set to hit the annual peak in July," the miner added.

In Shaanxi's Yulin, some traders and washing plants scaled back coal purchases and stockpiling, yet short-haul deliveries to nearby rail stations and washing plants persisted. Together with brisk chemical needs, local 6,100 Kcal/kg NAR washed coal rose 15 yuan/t to 641 yuan/t, ex-washplant with VAT.

In addition, with the peak season drawing closer and power plant inventories edging lower, expectations of restocking wave are encouraging miners to hold firm in the near term.

On May 14, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 696 yuan/t, mine-mouth with VAT, down 2 yuan/t on the day, yet Ordos 5,500 Kcal/kg NAR material remained unchanged at 571 yuan/t. Yulin 5,800 Kcal/kg NAR grade gained 1 yuan/t to 643 yuan/t.