Coal mine capacity utilization across China's top producing regions rebounded above 90% as output edged higher, though slower trader purchases left mines with modest inventory build-ups.

The three key producing provinces of Shanxi, Shaanxi and Inner Mongolia saw capacity utilization at 160 surveyed coal mines reach 90.18% in the week of October 15-21, up 1.21 percentage points from the previous period, according to Sxcoal data.

By region, Shanxi's surveyed mines ran at 81.85%, up 2 percentage points; Shaanxi stood at 92.72%, up 1.9 percentage points; and Inner Mongolia reached 93.47%, up 0.28 percentage points.

Pithead output rose as a few previously suspended mines resumed normal operations and some completed longwall relocations. Marginal supply releases, combined with news of production increases, strengthened expectations of a broader restart, easing the previously tight supply picture.

Total output at the surveyed mines in the three regions reached 16.37 million tonnes in the week, up 1.0% week on week.

Shanxi's surveyed mines produced 3.92 million tonnes, up 2.5% from the previous week; Shaanxi produced 5.02 million tonnes, up 0.9%; and Inner Mongolia produced 7.43 million tonnes, up 0.3%.

Early in the week, active pithead purchases by traders and firm rigid demand from chemical and other end users supported market sentiment. Midweek, as supply-guarantee meetings intensified and restart expectations grew, a wait-and-see mood spread, slowing purchases by coal yards and rail station traders and reducing truck traffic at some mines that had raised prices sharply earlier.

Against this backdrop, inventories at pithead mines stayed at mid-to-high levels, with most mines seeing fewer coal trucks and rising stock pressure. As of October 21, total inventory at the surveyed mines in the three regions reached 4.06 million tonnes, up 1.1% from the previous period.

Shanxi's surveyed mines held 1.06 million tonnes, up 1.1%; Shaanxi held 952,000 tonnes, up 0.5%; and Inner Mongolia held 2.05 million tonnes, up 1.4%.

With supply rising and demand slowing, market sentiment shifted from bullish to cautious, pressuring prices lower as mine inventories accumulated. However, capacity tightening at month-end and the gradual release of winter stockpiling demand should provide some support and limit the downside. Market participants will be watching the pace of winter restocking, supply recovery and any policy adjustments.