Thermal coal trading at northern China transshipment ports remained moderate mid-week, as sellers held largely firm on offers while downstream buyers stayed on the sidelines, awaiting price corrections.

Market participants remained divided on the near-term outlook. Bears pointed to elevated inventories at northern ports and persistent pressure to rotate stockpiles, arguing that the path of least resistance is to sell into any price strength. They largely expected that overarching state supply-security policies would prevent any significant supply-demand gap from opening up, despite ongoing safety inspections in major mining areas.

Bulls, however, countered that power plant inventories remained relatively low compared to historical levels for this period, noting that restocking demand will intensify as summer temperatures climb. They also emphasized that railway logistics bottlenecks and localized supply constraints mean that once port stocks are drawn down, replenishment will be slow, a factor structurally supporting sellers' offer prices.

Offers of some 5,000 Kcal/kg NAR coal (1% sulfur) were heard at a parity to the CCI 5000 index, yet bids were heard at 2-3 yuan/t discounts. Low-sulfur grades were largely offered above the index, sources confirmed.

One eastern China-based trader source offered 5,500 Kcal/kg NAR Shaanxi coal (0.5%-sulfur) at 875 yuan/t, FOB northern port with VAT, yet disclosed muted buying interest as downstream users were waiting for price cuts.

Prices of 4,500 Kcal/kg NAR coal were relatively firm due to supply strain. Multiple participants reported no discounted availability, with offers uniformly at index plus 5 yuan/t or above. A deal of unblended Shanxi 4,500 Kcal/kg NAR coal (0.6% sulfur) was heard to have changed hands at around 683 yuan/t.

Participants expected such a standoff to persist throughout this week, with sentiment leaning toward price stability. Several participants said any corrections will be short-lived and small, given the high costs.

Sxcoal estimated on June 9 that the all-in-delivered costs for Datong 5,500 Kcal/kg NAR coal from Shanxi to northern ports remained more expensive than portside equivalents, with the spread expanding by 6 yuan/t week on week to a significant 43 yuan/t.

Yulin 5,500 Kcal/kg NAR coal encountered a smaller price inversion when delivering to northern ports, exceeding portside prices by slightly over 7 yuan/t, according to the estimate.

On June 10, the CCI Index for 5,500 Kcal/kg NAR coal stood at 865 yuan/t FOB with VAT, flat day on day; the index for 5,000 Kcal/kg NAR coal was unchanged at 774 yuan/t and 4,500 Kcal/kg NAR coal at 675 yuan/t.

Import market still mixed

The import coal market still presented a divergent picture. Prompt-delivering Indonesian low-CV cargoes faced downward pressure, while forward cargoes, mainly with July to early August delivery laycan, held relatively firm, even with a slight upward bias.

Sellers of forward tonnage showed little interest to discount, with the prevailing view that Indonesia's production growth expectations, despite the recent RKAB expansion news, will not translate into significant near-term supply increases, leaving peak-season prices well-supported.

Some July-August-delivering Panamax 3,800 Kcal/kg NAR coal was heard offered at $70-73/t FOB, while counteroffers were at $69-70/t. Panamax vessel freight rate from Kalimantan to South China eased to $10/t or so, slightly reducing the seaborne coal's price disadvantage, sources added.

Several late June to early July-delivery same-CV cargoes were heard offered by Chinese traders at around 600 yuan/t, CFR South China with VAT, which translates into $67/t FOB.

Port congestion in South China, following a large arrival of seaborne cargoes in May and early June, continued to weigh on spot sales, with long vessel queues at discharge ports giving downstream buyers leverage to push down near-term tender prices. One market source noted that power plants have been using this window to lower procurement bids.

One state-run power utility reportedly awarded Indonesian 3,800 Kcal/kg NAR coal through a tender at 603.8 yuan/t CFR South China with VAT, with delivery between July 3 and July 10, netting back to $67.13/t FOB on a Panamax basis. It also bought ultra-low-CV 3,400 Kcal/kg NAR coal at 532 yuan/t CFR, translating to $57.8/t FOB on the same basis.

On the high-CV segment, Australian 5,500 Kcal/kg NAR coal was held firm, with most participants expecting prices to stay firm heading into the peak summer demand period of July-August. Panamax July-loading cargoes were heard quoted at $106-107/t FOB, with freight to south China at approximately $20/t.

On June 10, the CCI index for Indonesian 3,800 Kcal/kg NAR coal was stable at $67/t FOB, standing still day on day at $79.5/t CFR. The index for Australian 5,500 Kcal/kg NAR coal was steady at $125/t CFR.