China's domestic thermal coal market received another bullish push from a leading mining group's price rise. Combined with sustained supply disruptions and resilient downstream demand, key producing regions maintained an upward price trajectory.
According to Sxcoal's latest weekly survey covering 160 thermal coal mines in Shanxi, Shaanxi, and Inner Mongolia, 41.25% of surveyed mines raised prices by an average of 37 yuan/t over July 31-August 6, with only 2.5% reporting minor declines of 12 yuan/t on average.
The supply-demand fundamentals remained tight. The average capacity utilization at Sxcoal-surveyed mines dipped 0.41 percentage point to 88.89% in the week ending August 6.
Although most mines have resumed normal operations following recent rainfall, lingering waterlogging issues continue to hamper production at several open-pit mines and curb transportation activities.
The National Meteorological Center forecasts potential heavy rainfall over August 7-9 in parts of northwestern China, Inner Mongolia, northern China, and the Yellow River basin. This, together with stricter safety and overproduction inspections, threatened further production recovery.
Meanwhile, a renewed heatwave in eastern and the Yangtze River Delta, now extending to southern China, kept power consumption elevated. Over August 4-6, service areas monitored by the State Grid Corporation of China witnessed electricity loads hitting historical highs for three consecutive days, peaking at 1.23 TW, which rose 53 GW from last year's record of 1.18 TW. Power loads are expected to remain above 1.2 TW on August 7.
While cooler temperatures following the beginning of autumn may moderate electricity usage, current coal consumption at power plants remained high with constrained hydropower output. Sxcoal data showed that daily coal burns at utilities under six major power groups reached 890,600 tonnes on August 6, up 0.09% day on day and 1.22% week on week. This triggered active essential purchases post-rainfall, especially in those regions testing generation capacity.
In addition, the leading miner lifted its third-party coal buy prices for 4,000-5,000 Kcal/kg NAR thermal coal sourced from major producing regions by 10-12 yuan/t starting August 7. This marked the second upward adjustment this month, reinforcing market confidence.
Metallurgical and chemical plants continued to make active restocking before raw material prices smashed new highs. Railway station-based traders and washing plants demonstrated particular enthusiasm for procurement, accelerating inventory drawdowns at mines.
Coal inventories at surveyed mines dropped 0.37% week on week to 4.08 million tonnes on August 6. Most cost-effective mines enjoyed long queues of coal trucks.
"The recent price increases are primarily rainfall-driven, alongside the mining group's price hike," said a miner in Inner Mongolia's Ordos. He offered slack coal (CV 4,800, S 0.3%) prices at 392 yuan/t, mine-mouth with VAT, up 5 yuan/t.
A second miner source confirmed unabated truck arrivals and steady shipments to long-term contract buyers, spurring 8 yuan/t price rises for 5,800 Kcal/kg NAR raw coal.
Coal prices stayed firm in Shanxi. Washed coal (CV 5,000, S 1%) climbed 35 yuan/t to 440 yuan/t, ex-washplant with VAT. "Production inspections haven't affected us as our output has been modest all year," a Shuozhou-based miner noted, adding that sales remained satisfactory.
Another miner in Changzhi produced 10,000 tonnes of coal each day but still did not build any inventory. He totally adjusted up prices for washed slack (CV 5,300, S 4.5%) by 120 yuan/t recently.
With the traditional peak consumption season approaching its conclusion and industrial users resisting further price hikes, the current rally largely hinged on supply tightness rather than demand expansion.
Some small-scale miners hence adopted a fast turnover strategy for external purchases, avoiding inventory accumulation amid market uncertainty, Sxcoal learned from sources.
Auction failures and price drops also emerged. In Shaanxi's Yulin, mixed coal (CV 5,700) was traded at 499 yuan/t with VAT, down 8 yuan/t, mainly due to slow offtakes.
Nevertheless, many miners retain optimistic near-term outlooks, citing impending safety inspections ahead of the military parade next month and ongoing weather-induced supply restrictions.
On August 7, Sxcoal assessed Datong 5,500 Kcal/kg NAR coal at 568 yuan/t, up 3 yuan/t day on day, while Ordos 5,500 Kcal/kg NAR coal gained 3 yuan/t to 499 yuan/t. Yulin 5,800 Kcal/kg NAR coal rose 2 yuan/t to 567 yuan/t.

Published Date:2025-08-08