China's thermal coal prices have achieved unprecedented levels, with the benchmark power-station coal price surging over 40% year-on-year to reach 1,003 yuan per tonne as of October 10, according to SunSirs data. This represents a dramatic escalation from approximately 700 yuan per tonne during the same period last year. The surge represents a quarter increase since mid-July, reflecting the severity of current market conditions and marking the first time prices have reached four figures in two years.
Domestic coal output has declined by more than 3% in the year through August compared to the same period in 2025, primarily due to enhanced safety measures implemented following a deadly mine collapse in Shanxi province in May. According to a local coal news provider, the market had anticipated that Shanxi would restore approximately 31 million tons of annualized production by year-end, but approval of restart applications has fallen short of expectations. Authorities are expected to maintain a cautious approach ahead of a major Communist Party meeting later this month, limiting scope for immediate relaxation of safety controls.
China's main coal rail corridor is undergoing three weeks of maintenance through October 26, which is expected to maintain elevated price levels. Additionally, shipments from Indonesia, China's major overseas thermal coal supplier, have declined sharply this year as Jakarta implemented output curbs to revive prices and boost state revenues. Recent drought conditions linked to the El Niño weather pattern have further disrupted operations, with reduced water levels in key coal regions forcing barge operators to cut cargo loads.
Despite being October, traditionally an off-season for coal consumption, the domestic thermal coal market has staged a bull run driven by robust demand fundamentals. Data from the China National Coal Association indicates that in early September, key monitored coal enterprises recorded sales of 70.17 million tonnes, with a daily average of 7.02 million tonnes. This daily average represented an increase of 220,000 tonnes (3.3%) from late August and a year-on-year rise of 290,000 tonnes (4.2%). Meanwhile, total electricity consumption across society surpassed the one-trillion-kilowatt-hour mark again in August, reaching 1.0332 trillion kWh—a year-on-year increase of 1.7%.
