China Coal Weekly: Northern Port Inventories Continue to Decline

Overview

This report is Morgan Stanley's weekly update on China's coal industry, focusing on changes in thermal coal and coking coal prices as well as inventories at northern ports. The report's core conclusion is that domestic thermal coal prices continued to recover, coking coal prices were mixed, and Bohai-Rim port inventories continued to decline in April; however, as traders' shipping interest remains weak and pressure on port storage capacity eases, the pace of future inventory drawdown may slow.

Core views

The report maintains a cautious view on China's coal industry. On the one hand, domestic thermal coal prices saw a modest recovery, with Qinhuangdao 5,500 kcal, CCI 5500, and Shanxi Datong mine-mouth prices all posting week-over-week increases; on the other hand, seaborne coal prices declined and coking coal prices diverged, indicating that demand and price momentum are not balanced. The decline in port inventories was mainly driven by dispatches outpacing arrivals, but the report notes that if traders' shipping willingness remains weak, the decline in northern port inventories may slow.

Analysis framework

The report uses a weekly high-frequency tracking framework, comparing week-over-week changes in coal prices, port inventories, rail arrivals, and port dispatches, and combines data from sources such as Sxcoal, CCTD, and McCloskeys to assess marginal changes in coal supply and demand.

Methodology notes

• Industry high-frequency trackingWeekly monitoring of coal prices and inventories

  Use thermal coal and coking coal prices, as well as port inventories, arrivals, and dispatch volumes, to judge marginal changes in supply and demand.

  Prices are used to observe changes in market transactions and expectations, while port inventories are used to observe supply-demand balance and pressure along the trading chain; declining inventories usually reflect dispatches exceeding arrivals, but if shipping willingness weakens, inventory drawdown may slow.

• Relative industry viewMorgan Stanley Industry View

  Industry views are categorized as Attractive, In-Line, Cautious, etc., to express judgments on industry performance relative to the benchmark over the next 12-18 months.

  This report discloses a Cautious view on China's coal industry, indicating that the analysts are cautious on the industry's performance over the next 12-18 months relative to the relevant market benchmark.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China coal industry

  covered industry

  Strengths

  Domestic thermal coal prices edged up and port inventories continued to decline.

  Weaknesses

  The industry view remains cautious, the extent of price recovery is limited, and coking coal performance is mixed.

  Comparison

  Compared with the end of March, Bohai-Rim port inventories fell from 29 million tonnes to 27 million tonnes; compared with the previous week, dispatch growth slightly exceeded arrival growth.

  Risks

  Weak trader shipping interest, slowing inventory drawdown, and falling coal prices.

• thermal coal

  core tracked commodity

  Strengths

  Qinhuangdao 5,500, CCI 5500, and Shanxi Datong mine-mouth prices all increased week over week.

  Weaknesses

  Seaborne NEWC prices fell week over week and BSPI was flat, indicating that the price recovery is not broad-based.

  Comparison

  Domestic prices performed better than seaborne prices.

  Risks

  Insufficient demand and declines in imported coal or seaborne coal prices could pressure domestic prices.

• coking coal

  core tracked commodity

  Strengths

  Liulin No. 4 FOR prices rose week over week, and QLD prices were flat.

  Weaknesses

  Liulin No. 4 mine-mouth prices fell week over week, with domestic coking coal prices showing mixed performance.

  Comparison

  Domestic mine-mouth prices and FOR prices moved in different directions, highlighting regional and value-chain differences.

  Risks

  Weak steel demand, coking coal price volatility, and profit pressure along the industrial chain.

Key data

• Qinhuangdao 5,500 kcal thermal coalRMB700/tonne, +0.1% week over weekAs of 2026-04-17.
• CCI 5500RMB772/tonne, +1.0% week over weekAs of 2026-04-17.
• BSPIRMB693/tonne, flat week over weekAs of 2026-04-17.
• Shanxi Datong 5,800 mine-mouth priceRMB630/tonne, +1.8% week over weekDisclosed in the main body of the report.
• NEWC thermal coalUS$134/tonne, -1.5% week over weekAs of 2026-04-17.
• QLD coking coalUS$232/tonne, flat week over weekAs of 2026-04-17.
• Liulin No. 4 mine-mouth coking coalRMB675/tonne, -2.2% week over weekDisclosed in the main body of the report.
• Liulin No. 4 FOR priceRMB1,550/tonne, +1.3% week over weekDisclosed in the main body of the report.
• Bohai-Rim port coal inventories27 million tonnesFor the week ending 2026-04-17, below 29 million tonnes at the end of March.
• Average daily rail coal arrivals at northern ports1.93 million tonnes/day, +1.68% week over weekSxcoal data.
• Northern port dispatch volumeabout 2.00 million tonnes, +1.99% week over weekDispatches stronger than arrivals drove inventories lower.

Impact & implications

The continued decline in inventories provides some short-term support for thermal coal prices, but the report does not interpret this as a clear industry inflection point. Prices remain differentiated: domestic thermal coal is recovering, seaborne coal is falling, and coking coal is mixed, indicating that the coal sector's fundamentals still require observation of demand sustainability, the pace of port inventory drawdown, and traders' shipping willingness. For coal equities, the industry view remains cautious, and the market is more likely to focus on whether the price recovery can sustainably translate into improved earnings expectations.

Risks

• Coal demand falling short of expectations could interrupt the price recovery.
• Weak trader shipping willingness may slow the drawdown of port inventories.
• Falling seaborne coal prices may weigh on expectations for domestic coal prices.
• Divergent coking coal prices reflect continued instability in downstream demand and transmission along the industrial chain.
• The research institution disclosed potential conflicts of interest related to investment banking business, shareholdings, or market-making activities with some covered companies.

What to watch

• Whether Bohai-Rim port inventories continue to stay below end-March levels.
• The relative strength of rail arrivals and port dispatches at northern ports.
• Whether Qinhuangdao 5,500, CCI 5500, and BSPI prices can continue rising.
• The impact of NEWC and QLD coal price trends on expectations for domestic coal prices.
• Changes in traders' shipping interest and pressure on port storage capacity.
• Subsequent rating and price changes for covered coal companies.