- Most mines yet to resume production, domestic supply tightens
- Indonesian output cuts raise fears of tight supply during Q2-Q4
Mysteel Global: China’s spot prices of thermal coal strengthened this week after the country reopened for business on 24 February from the Chinese New Year (CNY) break. Tightening domestic availability, coinciding with Indonesia’s planned production quota cuts, is raising concerns about near-term supply and lifting market sentiment.
According to Mysteel’s assessment, on 25 February, the benchmark 5,500 kcal/kg NAR thermal coal price reached RMB 731/tonne (t) ($106.9/t), FOB northern port with VAT, compared with RMB 721/t recorded on 14 February, the last working day ahead of the holiday.
Domestically, the post-CNY recovery across private mines in major producing regions has progressed more slowly than in previous years. Most mines don’t expect to fully restart production until after the Lantern Festival falling in early March, sources noted. “Effective supply has been notably short in the market, as most private mines have yet to resume their operations,” a coal miner said.
On the other hand, though state-owned mines were working normally during the holiday, they provided little by way of spot supply as most of their production meets long-term contract obligations, Mysteel Global learns.
Mysteel’s survey among 462 thermal coal mines across the country showed their output averaged 4.4 million tonnes (mnt)/day during the 13-19 February period, down 13.6% from the week prior. The figure was even lower than the average 4.53 mnt/d achieved during last year’s CNY period.
In terms of coal stockpiles at northern ports — another figure used to gauge overall supply in China’s domestic market — the eight Bohai Rim ports monitored by Mysteel continued to draw down stocks during the holiday as outbound shipments exceeded inflows, leaving inventories near the lower end of historical seasonal ranges. As of 25 February, their combined inventories had fallen to 22.74 mnt, nearly 18% lower than the year-prior level.
At the same time, tightening overseas supply has amplified the supply shortage worries. Indonesia has pledged to cut 2026 production to roughly 600 mnt from 790 mnt realised in 2025, as reported. This, alongside the implementation of new export tariffs ranging from 5% to 11%, is expected to reduce that country’s coal exports by as much as 180 mnt this year.
Meanwhile, as the Jakarta government has yet to finalise its quota approvals, many miners are worried about output sustainability during Q2-Q4, causing them to be cautious about spot sales.
This has sent prices soaring dramatically in the seaborne market. On 25 February, Mysteel assessed Indonesian 3,800 kcal/kg NAR coal at $59/t FOB Kalimantan, up from $57/t on 14 February.
Rising prices have heavily eroded the price advantage of Indonesian coal, prompting some Chinese buyers to shift their interest back to domestic coal. Sources report that after the CNY holiday, some coastal power plants were seeking high-quality cargoes at northern ports to blend with their inferior cargoes. Deals were apparently done much higher than at current selling prices.
In the near term, the supply worries will continue to amplify price volatility in China’s spot market for thermal coal. Prices are expected to trend higher through early March, with the benchmark price likely to reach RMB 750-770/t at northern ports, sources suggest.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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