China's seaborne imported thermal coal market remained subdued, with trading activity limited by weak utility demand and high port inventories, even as uncertainty surrounding Indonesia's approvals for additional RKAB quotas limited future supply visibility.

Panamax Indonesian 3,800 Kcal/kg NAR coal was offered some $65/t FOB, with the freight rates from South Kalimantan to South China at around $8.5-9/t.

Importers noted the seaborne market remained challenging to operate in, as landed costs still generally exceeded domestic utility tender prices.

Some traders estimated current delivered costs for Indonesian 3,800 Kcal/kg NAR coal at about 560 yuan/t, CFR South China with VAT, while the lowest bidding prices to the latest utility tenders drifted lower to 549 yuan/t, leaving limited room for profitable resale.

Despite this, some utilities kept cancelling tenders due to price differences between bids and their desired levels, leaving sentiment broadly cautious and traders largely shifting to a thick wait-and-see approach.

High inventories in southern ports and weaker power demand caused by recent rainfall in southern China also reduced utilities' urgency to secure additional cargoes, sources noted. Sxcoal's data showed that coal stocks at Guangzhou port retreated for the second straight day as of July 29, with total inventories at 3.37 million tonnes still 13.7% higher than the year-ago level. Stocks at Fangcheng port also hovered at relatively high levels.

On the supply side, sources said that the key uncertainty remained Indonesia's RKAB approval process. Negotiations between Indonesia's Ministry of Energy and Mineral Resources, state utility PLN and mining companies over additional RKAB quotas have not progressed smoothly, sources disclosed.

The main disagreement reportedly concerns the domestic market obligation, or DMO, ratio attached to incremental production, with miners and the government yet to reach an agreement. Therefore, although the market expects Indonesia's annual production quota could eventually increase, additional export supply may not emerge quickly.

Meanwhile, some participants noted potential supply disruption due to drier-than-normal conditions across parts of Kalimantan and Sumatra, raising concerns over declining river levels that could restrict barging operations from inland mines to export terminals.

The country's Meteorology, Climatology, and Geophysical Agency BMKG forecast lately that the peak dry season is projected to occur between July and September, with August expected to be the most widespread dry period. BMKG's projections indicate that the 2026 dry season could last longer than normal in many areas, with below-average rainfall expected across a large part of the country.

Indonesian coal supply chain is highly dependent on river transportation, and previous drought events have showed that prolonged dry weather can create meaningful logistics constraints for Indonesian coal exporters.

On the high-CV segment, offers from traders for Australian coal slightly eased, expanding their price advantage compared with domestic equivalents, sources said.

However, this did not translate into any noticeable rebound in utility purchases. "Power plants mainly purchase low-CV coal, with limited appetite for mid-and high-CV grades," one Fujian-based trader source commented.

Australian 5,500 Kcal/kg NAR coal was quoted around $96-97/t FOB, with transactions heard at $94/t. Panamax freight rates from Newcastle port to South China hovered at around $18-19/t.

On July 30, the CCI index for Indonesian 3,800 Kcal/kg NAR coal stood at $62.5/t FOB and $73.2/t CFR South China port, unchanged compared with a day earlier. The index for Australian 5,500 Kcal/kg NAR coal was also flat at $113/t CFR.