Rising Demand VS Supply Recovery: Prices May Stabilize in Early July
Time:2025-06-26 09:19:56 Source:CCTD
By Joe
June 25, 2025
Edited and Updated by Ethan Ma
June 26, 2025
Key Points:
- Hot weather is driving up daily coal burn at power plants.
- End of inspections and safety campaigns will boost mine output.
- Non-power demand weakens amid heat-driven production cuts.
- Price Outlook: Coal prices may stabilize as supply growth outpaces demand.
CCTD China Coal Market Network is one of the most trusted coal industry think tanks in China, providing exclusive and extensive data coverage.
With the summer peak season approaching, China’s thermal coal market is witnessing a tug-of-war between tightening supply at ports and improving demand from power plants. As of June 25, the “CCTD (daily) Index” for 5500K, 5000K, and 4500K grades stood at 619, 546, and 482 yuan per ton, respectively, up by 0, 2, and 2 yuan from the previous day.
Demand: Power Plants Drive the Market
Rising temperatures across most of China are expected to push up daily coal consumption at power plants in early July. According to the National Climate Center, early-July temperatures will be above seasonal norms. This will likely boost spot market procurement by power utilities, especially as inventories begin to decline.
Supply: Production Recovery in Sight
Coal output is set to rebound in early July as the national “Safety Production Month” wraps up and the latest round of central environmental inspections concludes. With fewer regulatory constraints, coal mines in major production regions are expected to resume or increase operations, normalizing supply levels.
Non-Power Sector: Demand Faces Seasonal Dip
In contrast, demand from non-power industries such as cement and steel is expected to weaken. July typically marks the beginning of staggered production in these sectors, and extreme heat may further limit construction activity. For instance, authorities in Hefei, Anhui Province have issued safety orders mandating outdoor work to stop at 40°C and limiting it to six hours per day between 37°C and 40°C.
Market Outlook: Dual Increase, But Supply Leads
Overall, the coal market in early July will likely feature simultaneous increases in both supply and demand. However, with industrial demand softening and supply conditions improving, the growth in supply may outweigh that of demand. In the absence of extreme heatwaves, thermal coal prices are likely to level off and remain stable.
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