CCTD Weekly Review - China (06/30-07/06)

Edited and Updated by Ethan Ma

July 7, 2025

Weak Demand Release Limits Coal Price Growth

Port Market
With high temperatures arriving downstream, market expectations for increased daily coal consumption have grown. Combined with persistently negative port delivery margins and supply shortages for certain coal types, traders showed a strong willingness to hold prices. Low-priced cargoes were scarce. However, power plants supplemented by long-term contracts and imported coal maintained high inventory levels, faced little replenishment pressure, and showed low acceptance of high market prices. Overall, demand-side procurement remained weak, capping the room for further price increases.

Production Areas
At the start of July, supply in producing areas began to recover, but demand-side procurement remained inactive due to a cautious market sentiment. Coal mines experienced growing sales pressure and some lowered prices to stimulate shipments, though with limited effect. Overall market sentiment was under downward pressure.

Outlook:
Short-term thermal coal prices are expected to fluctuate within a narrow range. On the one hand, supply shortages at ports and negative delivery margins provide price support; on the other, high inventories at power plants and weak procurement intentions amid resistance to high prices will likely limit any significant price increases.

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Regional Market:
[Bohai Rim Ports]
Port prices remained firm, supported by declining inventories, negative delivery margins, and limited supply of premium coal. However, downstream users maintained sufficient inventories and showed clear resistance to high prices, resulting in intensified supply-demand tension. Attention is focused on changes in end-user demand.

[East China]
Thermal coal prices fluctuated narrowly. Coke prices were steady, while coking coal prices rose, increasing cost pressure on coke producers. Environmental inspections also limited output recovery. On the demand side, recovery is evident as steel mills and speculative buyers re-entered the market, reducing coke inventory pressure. The market fundamentals are improving.

[North China]
Coke prices were stable. Coke plants saw rapid destocking and rising raw material costs, with environmental controls further limiting operations. Coke producers are keen to raise prices. Steel mills, benefiting from improved profit margins, increased output and procurement demand.
According to CCTD data, coking coal prices in Shanxi rose by RMB 0–10/t from the previous period, with Linfen area seeing a RMB 0–5/t increase. Thermal coal prices saw a slight uptick.

[Northeast & Eastern Inner Mongolia]
Regional prices remained stable. Long-term contract supply was steady, and downstream demand was mainly rigid, keeping the market calm.

[Central & Southern China]
Coal prices fluctuated narrowly. Despite rising temperatures and higher power plant consumption, inventories remained high due to sufficient long-term and imported coal, limiting large-scale replenishment. End users were reluctant to accept high offers. However, traders maintained price support due to cost pressures and expectations of stronger seasonal demand. The market remained in a stalemate.
As of June 25, 2025, daily power consumption in Hubei Province reached 785 million kWh, with peak load at 37.436 million kW.

[South China]
Imported coal prices fluctuated narrowly. As import price advantages widened, downstream inquiries increased. Still, with inventories adequate, actual procurement remained modest, and price acceptance was limited. Supported by production costs, sellers kept prices steady. The market remains in a stalemate.

[Northwest China]
Long-term contract prices at mines remained stable, while market coal prices declined. Weak end-user demand and limited hauling enthusiasm persisted. Despite rising outsourced purchase prices by large groups, downstream resistance to high prices led to rising pithead inventories. Some mines slightly lowered prices to boost sales. Market sentiment is under pressure.

[Southwest China]
Thermal coal prices held steady. The coke market was stable. Rising steel prices boosted profits and production, increasing coke demand from both steel mills and speculative buyers. Coke supply fundamentals improved, supported by rising costs, constrained coke plant operations, and falling inventories. Thermal coal production was stable, with downstream rigid demand maintaining a steady market.