Why Coal Prices Still Holding Up Despite Increasing Port Stocks - Analysis

According to monitoring data from China Coal Market Network (CCTD) covering 59 major ports nationwide, coal inventories at Chinese ports have shown a “decline first, then increase” pattern so far in 2026. At the beginning of the year, total port inventories stood at around 71 million tonnes. They then gradually declined, reaching a short-term low of approximately 61 million tonnes in early February. Since then, inventories have steadily recovered. As of May 11, total port coal inventories had risen to 71.656 million tonnes, once again exceeding 70 million tonnes and setting a new year-to-date high.

At the start of the year, cold weather boosted electricity demand in eastern coastal regions, leading to a significant increase in daily coal consumption at power plants. At the same time, disruptions to Indonesian policy caused a notable decline in imported thermal coal supply, accelerating inventory drawdowns at Bohai Rim ports. However, starting in March, domestic coal production remained at elevated levels. The previously persistent “inverted freight cost” situation between mining regions and ports was gradually corrected, and railway shipment volumes also stayed high. Driven by these combined factors, inventories at northern ports rebounded rapidly, reaching 37.304 million tonnes as of May 11, an increase of 21.6% from the recent low.

Meanwhile, southern port inventories also showed a recovery trend, reaching 34.351 million tonnes as of May 11, up 16.4% from the year’s low. With the summer peak demand season approaching, inventories at some power plants remain relatively low. Against the backdrop of expectations for a “less pronounced off-season” and rising coal prices, end-users have begun releasing procurement demand earlier than usual, contributing to the rebound in regional port inventories.

However, despite the recent increase in national port inventories, levels remain broadly lower year-on-year across all regions. Total inventories are 8.9% lower than the same period last year, northern ports are down 12.3%, and southern ports are down 5.0%.

Therefore, the current inventory buildup is more of a seasonal normalization rather than a structural surplus. According to the China Coal Industry Association’s recently released “2025 Coal Industry Development Annual Report,” coal consumption is expected to grow slightly this year. Power sector coal use is projected to increase modestly, with coal-fired power plants continuing to play an important role in peak shaving and grid stability. As coal shifts from a single energy source toward both fuel and raw material usage, the coal chemical sector is expected to maintain strong production momentum, further supporting industrial coal demand. At the same time, thermal coal imports have declined significantly year-on-year, contributing to a more balanced domestic supply-demand structure.

In addition, CCTD high-frequency monitoring data shows that as of the week ending May 13, average daily coal consumption among coastal power plants across eight provinces was up 7.1% year-on-year, indicating continued demand resilience. Data also suggests that in the second half of May, restocking demand from end-users is likely to become more pronounced, further supporting the coastal coal market.

CCTD’s monitored major port inventories typically fluctuate within a range of 60 to 70 million tonnes. Although current levels have risen notably, they remain within seasonal norms. Given reduced imports, stable domestic supply, and resilient end-user demand, current inventory levels have not yet exerted significant downward pressure on prices. As a result, the coastal coal market is expected to maintain a relatively firm trend going forward.

Index	Basis	Date
Datong 5500	ex-mine	07-01
Shuozhou 5200	FOR	07-01
Ordos 5500	ex-mine	07-01
Yulin 6200	ex-mine	07-01
Liulin Low-sulphur	ex-mine	07-01
Gujiao Low-sulphur	FOR	07-01
Xingtai Low-sulphur	ex-Factory	07-01
Yangquan PCI	FOR	07-01