Driven by improved market inquiry demand and heightened price acceptance among some essential users, traders' resolve to maintain prices continues to strengthen. Additionally, current shipping costs remain inverted, Bohai Rim port inventories have dropped to last year's levels, and daily consumption remains above year-ago levels—all providing favorable support to the market. Last week, coal prices maintained an upward trajectory.

On the supply side, the resumption of coal mine operations and the combined impact of environmental and safety inspections have limited supply growth. On the demand side, the approach of the Spring Festival and significant temperature drops have led to a slight increase in daily consumption at power plants. However, demand from non-power sectors remains low due to the winter production off-season, resulting in overall weak demand. Next week presents both advantages and disadvantages. Bohai Rim ports are expected to continue destocking, but power plant daily consumption will decline more rapidly. This dual weakness in supply and demand will stabilize coal prices amid their upward trend. The market is likely to undergo oscillating adjustments, with minor fluctuations possible in localized areas due to weather changes or short-term supply-demand swings.

Domestically, supply will tighten slightly as the Spring Festival approaches, though the impact remains limited. Amid the cold snap, power plant daily consumption has risen rapidly, accelerating port inventory drawdowns. Traders' willingness to sell has weakened, but as the cold snap is short-lived, end-users are primarily focused on proactive inventory reduction and fulfilling long-term contracts. Market coal procurement remains relatively passive, with port coal prices stabilizing with slight increases. As the Spring Festival approaches, more private mines are shutting down for holidays, while large state-owned mines maintain stable production, leading to a slight contraction in short-term supply. This week, temperatures across most of China remained near seasonal averages. Demand-side factors, including the approaching Spring Festival and stable temperatures, limited potential for significant increases in power plant daily consumption. Users are expected to maintain a pace of small-batch, on-demand restocking. Overall, the coal market is projected to exhibit weak supply and demand this week, with relatively stable prices trending slightly upward. Specific developments will depend on weather changes and the decline in industrial electricity loads in coastal regions.

Last week, traders showed divergent views. Some, supported by high costs, believed the ongoing cold snap would further boost thermal coal consumption and anticipated pre-holiday restocking demand from end-users. They decided to take another gamble this week, particularly those holding high-quality low-sulfur coal who maintained firm pricing while waiting. Others, however, are eager to offload inventory, aiming to accelerate sales and take early holidays to return home for the New Year. They note that overall inventory levels in the mid-to-downstream sectors remain high, non-power enterprises will gradually enter holiday shutdowns, and the short-term cooling effect on coal prices is limited. They anticipate the market will continue its weak trend before the Spring Festival and are preparing to clear their inventories and exit the market.

Major power plants continue to rely primarily on long-term contract coal, supplementing only with small batches of market coal. Large-scale, concentrated market coal procurement has not materialized. With the end of the severe cold spell and industrial shutdowns for the Spring Festival, daily coal consumption is poised to peak and decline, putting the sustainability of coal price support to the test.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.