In the fourth quarter of 2025, the coal market supply-demand dynamics shifted from tightness to relative ease. Domestic thermal coal prices overall rose initially before facing downward pressure and correcting. Looking ahead, thermal coal demand improvement in Q1 2026 may be limited. Coal mine output is expected to remain relatively stable, with only slight contraction around the Spring Festival period. Coal prices may fluctuate downward before hovering near the bottom.
Q4 2025 Coal Prices: Rise Then Fall
The domestic thermal coal market experienced an overall upward trend followed by a decline in Q4 2025, with prices peaking at the highest level of the year. Taking Q6000 kcal thermal coal in the Yulin region as an example, the mainstream pithead price stood at 595-610 RMB/ton as of December 23, up 15 RMB/ton (2.55%) from the end of Q3. The average price for Q4 was 645.7 RMB/ton, up 92.4 RMB/ton or 16.70% from Q3. The peak price occurred in late November at 680-700 RMB/ton, also marking the highest point in 2025, while the trough was reached in early October at 580-590 RMB/ton, with a price fluctuation range of 17.95%.
Overall, the thermal coal supply-demand dynamics in Q4 shifted from tightness to relative ease. After sustained price increases through mid-November, coal prices entered a downward trend due to factors including supply contraction falling short of expectations, mounting pressure from elevated inventories, and diminished prospects for a cold winter.
Specifically, on the supply side, the year-on-year decline in coal production gradually narrowed, with year-end supply contraction proving less severe than anticipated.
According to National Bureau of Statistics data, from January to November, raw coal production in large-scale industrial enterprises reached 4.4 billion tons, a year-on-year increase of 1.4%. Particularly after November, as temperatures dropped and China entered the critical winter peak demand period, major producing regions and large coal enterprises actively ensured domestic supply. Production release improved, with raw coal output showing significant month-on-month growth and a narrowing year-on-year decline. In December, most major coal mines continued proactive supply efforts. By the latter half of the month, some mines gradually suspended production and sales after completing their annual targets.
Regarding inventories, coal stocks at the three northern ports (Qinhuangdao Port, Caofeidian Port, and Jingtang Port) have accumulated continuously since the fourth quarter, now approaching historical highs. According to port authority data, as of December 23, coal inventories at these three northern ports totaled 29.75 million tons—1.31 million tons below the historical peak but 9.4 million tons above the year's lowest inventory level. Coal inventories at northern ports remain at historically high levels, indicating a notably relaxed supply-demand situation. Port coal prices continue to face downward pressure, with the price center steadily declining. As of December 23, the delivered price for Q5500-calorie thermal coal at Qinhuangdao Port stood at CNY705 per ton, down CNY125 per ton from the year's peak but up CNY87 per ton from the year's trough.
Regarding imports, domestic coal imports have remained at relatively high levels since the fourth quarter, driven by two factors: First, the fourth quarter coincides with China's peak winter coal consumption season, where increased power plant coal consumption boosts demand for imported coal. Second, imported coal prices still offer a certain cost-performance advantage compared to domestically traded coal of the same calorific value, leading domestic coal users to prioritize more cost-effective imported coal sources during procurement. Under these dual influences, domestic coal imports have maintained relatively high levels since the fourth quarter. According to General Administration of Customs data, coal imports in November 2025 reached 44.0534 million tons, ranking as the second-highest monthly volume this year.
On the demand side, market support strength initially remained robust before weakening significantly in the fourth quarter. According to statistics from Zhuochuang Information, as of December 18, the operating rate of major power plants in Shandong Province stood at 85.71%, 14.29 percentage points lower than the same period last year.
Coal Prices May Hover Near Bottom in Q1 2026
Looking ahead to the next quarter, the supply side will see coal mines commence new annual production targets after the New Year, with output stabilizing and generally outperforming the latter half of December 2025. However, as the Lunar New Year approaches in the latter part of the twelfth lunar month, some mines will gradually suspend operations for holidays, causing a temporary contraction in market supply. Supply will resume as mines restart production around the Lantern Festival following the holiday. However, the sustained decline in coal prices will erode mine profitability and intensify loss pressures. Consequently, production costs are expected to impose a floor constraint on coal prices.
On the demand side, market support strength in the fourth quarter initially remained robust but then weakened significantly. According to statistics from Zhuochuang Information, as of December 18, the operating rate of major power plants in Shandong Province stood at 85.71%, 14.29 percentage points lower than the same period last year.
Coal Prices May Hover Near Bottom in Q1 2026
Looking ahead to the next quarter, the supply side will see coal mines commence new annual production targets after the New Year, with output stabilizing and generally outperforming the latter half of December 2025. However, as the Lunar New Year approaches in the latter part of the twelfth lunar month, some mines will gradually suspend operations for holidays, causing a temporary contraction in market supply. Supply will resume as mines restart production around the Lantern Festival following the holiday. However, the sustained decline in coal prices will erode mine profitability and intensify loss pressures. Consequently, production costs are expected to impose a floor constraint on coal prices.
On the demand side, January-February falls during the coldest period of winter, requiring close attention to weather changes. However, with inventories in the mid-to-downstream sectors remaining largely elevated and non-power terminals maintaining strong price-pressuring and volume-controlling procurement sentiments, demand may continue its weak trend in the first half of January. In the latter half, pre-holiday stockpiling demand may gradually emerge, potentially providing temporary support for coal prices, though the upside remains limited due to inventory constraints. February trading activity may be subdued due to the Spring Festival holiday. By March, as the heating season nears its end, demand will gradually transition into the traditional off-season, reducing supportive factors.
Overall, the domestic thermal coal market in Q1 2026 is expected to experience a downward trend followed by bottoming out and consolidation.
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