Recently, the domestic thermal coal market has been characterized by a tug-of-war between expectations for peak-season demand and high inventory levels, resulting in a trend of "steady-to-firm" prices at ports and "steady-with-fluctuations" prices at mine mouths. Although high temperatures have boosted daily coal consumption at power plants and improved market sentiment, high terminal inventories and weak non-power demand have limited the potential for significant price increases.

I. Port Spot Prices Remain Firm; Low-Calorific Coal in Short Supply

Last week, thermal coal prices at northern ports remained generally stable, with slight rebounds at some locations. As of July 31, the spot price for Q5500 thermal coal at Qinhuangdao Port was approximately 823 RMB/tonne; at Huanghua Port, the FOB price was around 827 RMB/tonne for Q5500 and 736 RMB/tonne for Q5000—both showing slight increases from the previous week. Market dynamics indicate a relative shortage of low-calorific coal, while high-calorific coal prices remained stable, reflecting an ongoing standoff between upstream and downstream sectors regarding costs and demand.

II. Prices in Major Producing Areas Remain Stable; Supply Remains Constrained

Last week, mine-mouth prices in major producing regions were generally stable, with slight declines in some areas. In Yulin, Shaanxi, spot prices were approximately 665 RMB/tonne for Q5500 and 709 RMB/tonne for Q6000; in Datong, Shanxi, the mine-mouth price for Q5500 weakly caking coal was around 701 RMB/tonne; and in Ordos, Inner Mongolia, the mine-mouth price for Q5500 ranged from 620 to 633 RMB/tonne—levels largely unchanged or slightly lower than the previous week. On the supply side, safety and environmental inspections in major producing regions have become routine; some mines halted or reduced production after meeting monthly quotas, limiting the growth of effective supply and providing strong price support at the mine-mouth level.

III. Import Coal Quotes Remain Stable; Tug-of-War Between Domestic and International Markets Intensifies

The import coal market is currently operating steadily, with buyers and sellers remaining locked in a standoff. Mainstream quotes for Indonesian Q3800 thermal coal (FOB, Panamax vessel) remain steady at $64–$65 per tonne; Australian Q5500 thermal coal is quoted at approximately 870 RMB/tonne; and Russian Q5500 thermal coal is priced at around 850 RMB/tonne (CIF, hold-bottom basis). With coastal power plants holding ample inventories, actual procurement is largely driven by essential restocking needs; a continued preference for driving down import prices has resulted in limited upward momentum for import coal costs.

IV. Key Drivers and Market Outlook

The market is currently in a state of weak equilibrium, characterized by defined upper and lower limits. On one hand, the first two-thirds of August fall within the peak summer heat period; high daily consumption at coastal power plants and a downward trend in port inventories provide solid underlying support for coal prices. On the other hand, inventories at northern ports and coastal end-users remain relatively high, and the supply of long-term contract coal is sufficient; a lack of concentrated restocking demand for spot-market coal constrains the potential for price increases.

Looking ahead, the thermal coal market is expected to fluctuate within a specific range throughout August. In the first two-thirds of the month, essential demand driven by high temperatures provides upward momentum for prices. However, as the peak heat season concludes and widespread high-temperature weather subsides toward the end of the month, residential electricity demand for cooling will likely decline marginally, potentially putting downward pressure on prices. Market participants are advised to closely monitor temperature fluctuations, the pace of inventory depletion at ports, and safety inspection policies in major producing regions, while adjusting their inventory and operational strategies accordingly.

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