- Coking coal may stabilise mid-Dec on winter restocking
- Weak demand persists while supply stays relatively tight
Mysteel Global: The Chinese coking coal market may stand a chance to bottom out in the second half of December, following an extended period of weakness in the first half of the month, driven by potential winter restocking from downstream coal users, Mysteel’s new monthly report on the commodity predicts.
By mid- or late-December, coking coal price retreats are likely to come to a pause, with the market shifting towards stabilization or even a slight upward trend, the report says, citing expected winter replenishments by coke and steel producers as a prime trigger.
The view is based on the seasonal trend that December typically marks a peak month for end-users to step up their coal hoardings in winter, a move to avoid potential mining and logistics disruptions caused by heavy snowfalls in northern coal hubs or the more than week-long Chinese New Year holiday. China will celebrate its Lunar New Year, or the traditional Spring Festival, on February 17, 2026, with the holiday spanning nine days from February 15, Mysteel Global notes.
Historical survey data from Mysteel showed that in December 2024, a total of 1.18 million tonnes of coking coal were added to stockpiles at the 230 independent coking plants Mysteel tracks, although their winter restocking last year started later than in previous years.
In addition, catch-up buying is also expected in the second half of this month, driven by an anticipated drawdown of existing coal stockpiles at downstream plants which have been holding back on new purchases since early November, according to the report.
On the supply side, the coking coal market is unlikely to face clear oversupply risks this month, keeping its fundamentals generally balanced, Mysteel’s new report points out.
By end-November, China’s overall coking coal supply, including domestic and imported cargoes, stayed 16.2% lower than the year-ago level, according to Mysteel’s tracking data. Specifically, stocks held by domestic coal mines registered a 16% on-year fall, while inventories of Mongolian coal piled at China’s Ganqimaodu border crossing and Mongolia’s Tsagaan Khad stockyard tumbled by 45% on year.
Despite earlier calls from China’s top state economic planner to reinforce coal production and transportation for the winter to ensure energy security, domestic coking coal mining activity has yet to gather pace. Mysteel’s survey on the 523 Chinese coking coal mines showed that their combined daily raw coal output averaged 1.91 million tonnes/day in November, lower by 5,000 tonnes/day from September.
Still, the first half of December will continue to feel the pinch of demand contraction, as downstream steel mills are likely to conduct more maintenance stoppages at their blast furnaces due to financial pressures. For example, except for a short recovery in mid-November, daily hot metal output at the 247 Chinese blast-furnace mills under Mysteel’s survey has been declining since early October, underscoring the pressure of their deteriorating profitability.
In parallel, support from the supply side will remain limited, since some miners’ extraction slowdown driven by completion of their output targets is expected to exert little impact on the overall availability of coking coal in the domestic market.
Part of the drag on recent coking coal prices was the dashed hope for domestic coal supply reduction from mid-November, which, coupled with higher coal imports, dampened market sentiment and checked coal transactions, Mysteel learns.
As of November 28, trading prices of domestic primary coking coal and fat coal plummeted by around RMB 100-200/tonne ($14-28/t) from a month earlier, while other blending coal prices declined by RMB 20-90/t, Mysteel’s assessments show.
Additionally, market players expect two or three more rounds of price cuts for domestic metallurgical coke this month, which will also weigh on the coking coal market, the report says.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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