Domestic miners have operated under strict constraints throughout the year, bolstered by weak demand from power generators during the summer months. September thermal power generation saw a 1.4% year-over-year contraction, reflecting that cooling demand. However, the market dynamics are shifting rapidly as the heating season approaches. Imports mirrored this domestic trend, falling 5.7% to 43.37 million tons compared to the previous year, though both production and import volumes showed modest growth when measured against August levels.

Spot thermal coal prices have surged 24% since mid-July. This rally stems from a combination of supply tightening and heightened consumption, exacerbated by a major safety crackdown in Shanxi following a deadly mining disaster in May. With coal still accounting for nearly 50% of China’s power generation, the government faces a delicate balance between safety oversight and energy security. Globally, the outlook remains bullish for the sector; the International Energy Agency projects coal demand to hit record highs this year, fueled by high LNG prices that keep coal-fired power plants competitive across international markets.