Thermal Coal to Continue Rebounding

By Hongmo June 23, 2025
Updated by Ethan Ma June 23, 2025

• Supply pressure eases in key regions as regulatory curbs limit output and auctions lift miner confidence.
• Port inventories remain tight, with sellers holding firm amid rising seasonal demand.
• Summer peak demand approaches, with extreme heat likely to push daily coal consumption higher.

CCTD China Coal Market Network is one of the most trusted coal industry think tanks in China, providing exclusive and extensive data coverage.

Recently, the supply pressure of thermal coal in the main production areas of Shanxi, Shaanxi, and Inner Mongolia, as well as at Bohai Rim ports, has decreased. Meanwhile, rising temperatures and improved market expectations have led to a pickup in demand compared to earlier periods. The continued improvement in the supply-demand balance has supported stable to slightly rising prices.

In production areas, the overlap of "Safety Production Month" and environmental inspections has continued to suppress supply in major producing regions this month. As prices dropped to acceptable levels and port inventories declined, demand from nearby end-users and rail loading stations has increased. Additionally, sustained improvements in large coal mine auctions have accelerated shipment rates from mines, prompting gradual price hikes. According to CCTD monitoring, the prices of 5,500 kcal coal in Ordos and 6,100 kcal coal in Yulin are currently around 420 and 490 yuan/ton, respectively—up 5 and 10 yuan/ton week-on-week.

At ports, due to high collection and transportation costs, the increase in incoming spot resources has been limited. Some high-quality resources remain tight, and with expectations of higher seasonal daily consumption, sellers have shown a strong willingness to hold firm on prices. As a result, port quotes have continued to rise slightly. Though end-users’ inventories remain sufficient and long-term contracts ensure stable supply, immediate demand has not significantly increased. However, due to the scarcity of low-priced resources, buyers are passively raising their price acceptance. As of June 23, CCTD Bohai Rim thermal coal spot reference prices for 5,500 kcal, 5,000 kcal, and 4,500 kcal coal stood at 619, 542, and 477 yuan/ton respectively—up 0, 1, and 1 yuan/ton day-on-day, and up 1, 5, and 4 yuan/ton week-on-week.

Looking into late June, positive factors for the thermal coal market are expected to strengthen further.
Firstly, as the peak summer power consumption season begins, daily coal consumption for power generation will continue to rise. High temperatures will increasingly impact market sentiment. According to Weather.com.cn, high temperatures are expected to persist across Northeast, North, and Central China in the coming period, with some regions possibly experiencing the highest temperatures of the year. Meanwhile, the southern Yangtze River region and southeastern China are also expected to remain oppressively hot.
Secondly, current environmental and safety regulations continue to impact coal production. Entering late June, some coal mines are beginning to fulfill their monthly production and sales targets, indicating further possible supply contraction. As such, supply-side pressure in the thermal coal market is likely to continue easing.
Thirdly, since the start of the year, market operations have remained difficult, and traders have been cautious with limited spot stockpiling. With supply from production areas still constrained and the cost gap for port delivery widening, any significant demand release in the near term could result in further tightening of high-quality coal supplies.

Overall, although non-power sector demand remains weak and the power sector is largely supported by long-term contracts and imported coal, spot transactions continue to focus on cost-effective coal types. Nonetheless, amid tightening supply and expected peak-season demand growth, optimism in the thermal coal market is likely to rise further. Prices are expected to continue their upward trend.