From June to July: Market Eyes Mild Rebound Amid Summer Demand & Supply Recovery

By Yang Jinbao
July1, 2025
Edited and Updated by Ethan Ma
July 2, 2025

Key Points:
      ·Domestic coal prices rebounded slightly in late June.
      ·Summer power demand supports July coal outlook.
      ·Import coal gains edge amid global price weakness.
 

Review of June
 

Production Areas:
In June, coal prices in northern Shanxi, Ordos (Inner Mongolia), and Yulin (Shaanxi) generally followed a “steady-then-rising” pattern. In the first half of the month, due to environmental and safety inspections, coal supply remained low across major production areas, with most mines adopting a sales-driven production approach. On the demand side, low power plant load and weak non-power sector demand led to subdued market activity, keeping prices largely stable or slightly soft.

In the second half of the month, improved haulage of end-users led to a moderate recovery in procurement by rail terminals, coal yards, and traders, which in turn boosted overall sentiment. Inventory levels at mines declined, and some key mine auctions saw rising prices, boosting expectations. As a result, coal prices in all three regions edged up slightly, with mid- to low-calorific value coal seeing better sales performance.

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Ports:
In June, coal prices at northern ports showed a modest upward trend. Under stricter safety supervision during “Safety Production Month” and tightening environmental rules, coal deliveries from production regions decreased. Meanwhile, with rising domestic temperatures in mid-to-late June, market activity picked up, marking the early signs of seasonal peak demand. Rising procurement costs and steady inventory drawdowns at ports strengthened traders' price-holding sentiment, especially for mid- and low-CV coal. By the end of June, CCTD spot prices for 5,500 Kcal/kg coal stood at around RMB 620/ton, up RMB 5 from last month; 5,000 Kcal/kg coal prices rose by about RMB 10 to RMB 550/ton.

July Outlook

Production Areas:
In July, following the conclusion of the safety month and the third round of central environmental inspections, coal production at mines is expected to resume more normal operations. This will likely push supply above June levels. On the demand side, rising summer temperatures will drive up daily coal consumption at inland power plants. While overall procurement will remain relatively high, the increase will be marginal and mostly fulfilled via long-term contracts. Traders’ bullish sentiment may persist, leading to moderate restocking. Overall, supply and demand are both expected to grow modestly, with coal prices likely to edge higher in a narrow range.

Ports:
Coal inflows to ports are expected to rise in July as supply disruptions ease and producers ramp up shipments to meet seasonal demand. On the outflow side, domestic electricity consumption will increase due to hotter weather, though gains may be capped by clean energy substitution. Non-power industrial demand from sectors like construction and chemicals will remain stable, driven by essential restocking. Thus, July is expected to feature stronger terminal demand under a high-season backdrop, leading to stable-to-slightly higher coal prices at ports.

Imports:
Overseas coal demand remains weak, and global coal prices are soft. As a result, imported coal has regained price competitiveness over domestic supplies. End-users are likely to increase import procurement, and imported coal is expected to play a more active supplemental role. July import volumes may show a modest month-on-month increase.