China's imported Mongolian coking coal market gained momentum at Ganqimaodu border crossing in the latter half of September after staying subdued in early this month.

Initially dampened by weak sentiment and cautious downstream procurement, transactions were tepid at the port. However, a mid-month recovery in futures prices, coupled with a wave of restocking ahead of the National Day holiday, spurred a rebound in both activity and prices.

As of September 28, the CCI index of Mongolian 5# raw coking coal averaged 974 yuan/t in the month, ex-stock Ganqimaodu with VAT, up 7 yuan/t from August. Meanwhile, Mongolian 3# washed coking coal averaged 1,089 yuan/t, up 12 yuan/t from the previous month.

Elevated prices underpinned record-breaking customs clearance volumes as traders made aggressive shipments amid attractive margins. In the month to September 27, the average daily customs clearance via Ganqimaodu reached 1,293 trucks, and a total of 31,021 trucks cleared for the month, both figures setting historical highs.

Under the Agreement on Border Ports and Their Management System between China and Mongolia, Ganqimaodu port is scheduled to close from October 1 to 7 for the National Day holiday, resuming operations on October 8. Customs clearances are anticipated to remain high post-holiday.

Spot cargo availability became tighter recently due to significant pre-sales, supporting coal prices. Earlier gains in futures provided arbitrage opportunities, prompting bulk purchases by traders. As a result, a large portion of September-loading premium grades, including Mongolian 5# raw coking coal, was already booked.

Despite high customs clearances, most recent transactions are for October forward deliveries because substantial volumes were allocated to fulfill long-term contracts and earlier pre-sale orders, leaving few spot resources available held by traders.

By month-end, tender prices from Chinese steel mills increased across the board, resulting from limited spot supplies and accelerated replenishment ahead of the holiday.

On September 23, a large steelmaker in northwestern China invited tenders for Mongolian 5# washed coking coal (S 0.65%, A 11%, GRI 80), and the trade was concluded at 1,379 yuan/t, up 70 yuan/t from September 18, Sxcoal learned. Another steelmaker based in Hebei tendered for Mongolian 5# washed coal (S 0.8%, A 10.5%, GRI 78) on the same day, and fetched the deal at 1,400 yuan/t, a 40 yuan/t rise compared to September 11.

Traders generally maintained an optimistic outlook for the fourth quarter, sustaining strong participation in online coal auctions.

As of September 26, the Mongolian Stock Exchange (MSE) had 90 coal auction sessions (including coking and thermal coal) for the month, with 68% of them concluded successfully. Although slightly below August's success rate of 78%, this marked a clear improvement compared to the first half of the year.

Energy Resources LLC sold Mongolian 3# washed coking coal (S 0.85%, A 11%, GRI 75) as high as 920 yuan/t this month, while Mongolian 4# raw coking coal (S 0.98%, A 15.09%, GRI 72) was traded by Tavantolgoi JSC at up to $101.5/t, both on a DAP Ganqimaodu (excl. VAT) basis and setting year-to-date highs.

Imported Mongolian coal prices may continue to be supported in the short term due to the current limited spot availability and robust shipment demand for pre-sold orders following the holiday port closure.

Still, uncertainties remain in the import market at Ganqimaodu port. If futures prices decline sharply, traders holding arbitrage inventories may rush to liquidate at lower prices. Additionally, fluctuations in domestic coking coal prices will influence Mongolian coal's price trajectory.