China's portside thermal coal prices took a respite after days of falling as trading activity came to a standstill due to divided expectations between sellers and buyers.

Offers for 5,500 Kcal/kg NAR thermal coal were around 1,010-1,030 yuan/t FOB with VAT at northern ports on October 16, the same as late last week, and those for 5,000 Kcal/kg and 4,500 Kcal/kg NAR grades were stable at 900-930 yuan/t and 760-780 yuan/t, respectively.

The market started the week with thin trading activity. Buyers and sellers were locked in a standoff. Only a few trades were concluded in small volumes, with 5,000 Kcal/kg NAR settled at 895-900 yuan/t and 5,500 Kcal/kg NAR at 1,010 yuan/t, according to traders.

Sellers have set up a defense line around 900 yuan/t FOB for 5,000 Kcal/kg NAR, which is more traded than other grades at present, citing high cost for newly-arrived shipments from mines. Offers even ranged 920-930 yuan/t for low-sulfur tonnages.

Buyers, however, were still waiting for further price cut, as 870-880 yuan/t were the highest prices they could accept for 5,000 Kcal/kg NAR material. Some buyers reported they have completed purchases until late November. "Prices have no more upward room if long-term contracts can be fully delivered," said a Zhejiang-based trader.

Currently, coal stockpiles at coastal power plants remained abundant. As of October 15, the major six coastal power groups held 14.25 million tonnes of coal in stock, enough to consume for 17.4 days on average. This compares with 12.87 million tonnes on the same day a year ago, which could support 15.8 days of use.

However, insiders still cautioned the importance of restocking in time. "What now look like well-stored inventories could be insufficient later in the winter when peak demand continues and supply is disrupted by adverse weather conditions," one insider pointed out.

In terms of supply, there was the news that all coal trucks are prohibited from entering Beijing as well as neighboring Tianjin and Hebei during October 15-18, as the Third Belt and Road Forum will be held in the capital city over October 17-18. However, the impact, as some traders told Sxcoal, was limited considering sluggish trading liquidity at northern ports now.

Stockpiles at Qinhuangdao port fell again in the past few days. As of October 16, the port's stocks totaled 4.88 million tonnes, down below the 5-million-tonn mark again. The U-turn occurred on October 14 when it plummeted from 5.11 million to 4.98 million tonnes. The stocks were 5.5 million tonnes at the beginning of the month.

On October 16, the CCI index for domestic 5,500 Kcal/kg NAR coal traded at Qinhuangdao port was assessed by Sxcoal at 1,020 yuan/t FOB with VAT, down 4 yuan/t from late last week; 5,000 Kcal/kg NAR coal assessment was at 908 yuan/t, down 2 yuan/t, and that for 4,500 Kcal/kg NAR at 753 yuan/t, a 4 yuan/t fall from late last week.

(Writing by Alex Guo  Editing by Harry Huo)
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