According to China Energy Net, coal prices rose overall in the first three months of the year, with a divergent trend observed in March alone. In the first three months of 2026, the average prices of Shanxi Premium Blended 5500 thermal coal and Grade 2 metallurgical coke at Tianjin Port both rose to varying degrees compared to the average for the whole of last year, with the price of main coking coal at Jingtang Port seeing the largest increase. Coal price trends in March showed divergence, with thermal coal prices rising significantly compared to the previous two months, defying the typical seasonal lull.

First Three Months: Supply: Raw coal supply remained stable in the first three months of 2026. Cumulative raw coal production for the period reached 1.203 billion tons, up 0.1% year-on-year, whilst March’s production stood at 441 million tons, up 0.0091% year-on-year.

Demand: End-user demand showed marginal recovery in the first three months of 2026, whilst downstream demand exhibited divergence. Fixed asset investment in the first three months of 2026 increased by 1.7% year-on-year, with manufacturing investment rising by 4.1% and real estate investment falling by 11.2%. Cumulative growth in thermal power generation reached 3.7% in the first three months of 2026; cumulative growth in coke production reached 2.4%; pig iron recorded a cumulative growth rate of -2.9%; and cement recorded a cumulative growth rate of -7.1%. In March, thermal power generation grew by 4.2%; coke production grew by 3.7%; pig iron production fell by 3.3%; and cement production fell by 21.00%.

Imports: Coal imports in the first three months of 2026 saw a slight year-on-year increase, whilst imports contracted in February 2026. 2026

Cumulative imports for the first three months reached 116.28 million tonnes, up 1.3% year-on-year. Imports for March alone stood at 39.06 million tonnes, up 0.84% year-on-year and 26.23% month-on-month.

Prices: The overall price level for coal rose during the first three months, whilst trends diverged in March. In the first three months of 2026, the average prices of Shanxi Premium Blended 5500 thermal coal and Tianjin Port Grade 2 metallurgical coking coal both rose to varying degrees compared to the average for the whole of last year, with the price of main coking coal at Jingtang Port showing the largest increase. Coal price trends diverged in March, with thermal coal prices rising significantly compared to the previous two months, defying the typical seasonal downturn.

The international situation is characterized by high uncertainty, which is favorable for coal. The uncertainty since the start of 2026 has primarily stemmed from production cuts in Indonesia and the US-Iran conflict. Regarding Indonesia, the approval of the RKAB (Annual Work Plan and Budget) was in line with market expectations; although there may be room for flexible upward adjustments in the future, a reduction in production is still anticipated for the year as a whole. Key focus areas include production releases in the second quarter and Chinese demand during the summer. It is expected that the shortfall in Indonesia’s coal exports to China for the year will need to be made up by other suppliers. Regarding the US-Iran conflict, market expectations for oil prices are highly volatile, with spot oil prices remaining at elevated levels. This benefits domestic coal chemical products, thereby boosting domestic thermal coal demand.

Coal prices remain firm despite the off-season, in line with expectations, and we are optimistic about performance during the peak season. Thermal coal has now entered the off-season, yet coal prices have remained firm, consistent with our earlier assessment. Given overseas uncertainties and domestic efforts to counter ‘involution’, we maintain a bullish outlook on the central price level. With inventories continuing to be drawn down, should overseas supply remain tight, coal price rises during the peak season may exceed expectations.

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