A five-day field trip to China's key coking coal heartland revealed that market participants expect tight supply to persist until year-end, supporting prices despite recent signs of softening demand, according to insights gathered from 11 companies.

The research tour, conducted by Sxcoal from November 10-14, focused on the major coal hubs of Wuhai and Ganqimaodu border crossing in Inner Mongolia. It involved on-site visits and discussions with four coal mines, one coal washing company, two coking plants, and four traders.

The investigation centered on market hotspots, including the impact of environmental inspections on coal mines in Wuhai, production levels, inventory, and factors influencing coal imports through Ganqimaodu, a vital gateway for Mongolian coking coal.

The tour confirmed that environmental measures have significantly curtailed output in Wuhai. "Most open-pit mines have been halted, and coal companies universally believe supply will be difficult to restore before the New Year," the research team found. While some production is expected to resume after the New Year holiday, the anticipated increase will be limited.

At Ganqimaodu port, traders reported that import volumes are expected to remain high. However, a key product, Mongolian #5 raw coking coal, remains in tight supply, indicating persistent structural shortages within the overall import flow.

The field trip also identified recent demand weakness. "With downstream procurement slowing, sales in both Wuhai and Ganqimaodu have weakened, and short-term prices are likely to see a correction," the findings noted.

Despite these near-term headwinds, the overarching sentiment among industry players was one of underlying optimism. The fundamental constraint of tight supply means market participants "remain broadly optimistic about the overall market trend in the later period," the research concluded.

The field trip provided first-hand evidence that environmental policy in Wuhai and volatile import flows through Ganqimaodu continue to be the dominant forces shaping the regional and Mongolian coking coal import market.

This article is a summary of the "Wuhai & Ganqimaodu Coking Coal Market Field Trip Report". The full report is available for $288. For ordering information, please contact us at inquiry@fwenergy.com or +86 7219 322.