Power coal prices in China's major producing region of Inner Mongolia softened slightly in December, according to the latest data from regional authorities.

The average pithead price for power coal across Inner Mongolia stood at 374.54 yuan/t ($52.5/t) in December, down 1.83% month on month and 6.46% year on year.

Lignite from eastern parts of the region averaged 323.57 yuan/t, down 0.22% on the month and 2.33% lower than a year earlier. Prices for Ordos fell 3.93% from November and 12.5% YoY, reaching 525 yuan/t averagely.

By calorific value, 3,850, 4,500, 5,000 and 5,500 Kcal/kg NAR grades posted average pithead prices at 361.13 yuan/t, 411.67 yuan/t, 530 yuan/t and 650 yuan/t, respectively, last month.

On a monthly basis, prices for the four grades declined by between 0.28-5.36%, while year-on-year declines ranged from 2-15.6%.

Demand for power coal was relatively stable with temperatures recovering to normal seasonal levels nationwide. Port- and utility-wise coal inventories remained elevated via-s-via averages for the same month in last years. Therefore, the regional authority expected downward pressure for local prices in the near term.

Meanwhile, coke prices in Inner Mongolia averaged 1,956.25 yuan/t in December, up 4.95% from the previous month but down 16.76% from the year-ago level.

Coking coal costs have retreated recently, prompting a minor cut in coke prices. Both steel mills and coke producers have seen coke inventory levels recover somewhat from earlier in the year.

As downstream steel sector activity is expected to weaken in winter, coke prices are forecast to ease slightly in January.

(Writing by Alex Guo  Editing by Emma Yang)
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