SunSirs: Supply Reduction and Demand Increase, China Thermal Coal Market Presents a 'Not Weak Off-season' Trend

In early October 2025, the thermal coal market broke the traditional off-season pattern, with prices rising strongly and breaking through the psychological barrier of 700 RMB/ton. This round of market trend is mainly driven by supply side tightening, coupled with pre holiday replenishment demand. It is expected that the price may experience a brief correction in mid to early October, but it is expected to stabilize or even rebound in late October under the support of multiple factors, and the overall space for correction is limited.

1. Market situation

Price level: The mainstream quotation for 5,500 kcal thermal coal around the Bohai Sea is 705-710 RMB/ton, while the CCI5500 index closed at 707 RMB/ton, up 3.2% month on month. Presenting a strong pattern of 'not fading off during the off-season'.

1. Core drivers of price increase

Shaanxi, Inner Mongolia, Shanxi and other major production areas have strengthened the management of coal mine overproduction and safety supervision and environmental protection inspections. Some coal mines have been ordered to shut down or voluntarily reduce production. During the National Day holiday, some coal mines were scheduled for maintenance, further exacerbating the supply shortage.

Non electric industry support: The operating rates of industries such as building materials and chemicals have rebounded, and coal consumption has significantly increased.

Winter reserve procurement ahead of schedule: The Northeast region has initiated winter reserve procurement, with a month on month increase in procurement volume.

Pre holiday stocking: To cope with the holiday, power plants and end users will replenish their inventory in a centralized manner.

1. Market dynamics

Port inventory: The inventory of the nine ports around the Bohai Sea has dropped to 20.83 million tons (the lowest level in the same period of the past three years).

Shipping inversion: The cost of shipping from the place of origin to the port can be as high as 50-70 RMB/ton, which undermines the enthusiasm of traders for shipping.

Imported coal market: The price advantage of imported coal is not obvious, and terminal procurement is slowing down.

Coal mine price adjustment: The prices of coal mines in the main production areas are frequently adjusted, especially for washed coal types, which exhibit a structural differentiation of "ups and downs".

1. Outlook for the future: first suppress and then rise, with limited pullback

Negative factors (which may lead to a pullback in the first half of the year):

The daily consumption of electric coal has entered the seasonal off-season, and the inventory of power plants has accumulated.

The policy of ensuring supply may promote the resumption of coal mine production.

Some traders may take profits after the holiday and concentrate on selling.

Prediction: The price may slightly fall to the range of 690-700 RMB/ton.

Positive factors (supporting the stabilization and rebound in the latter half of the year):

Autumn maintenance of Daqin Line (October 7-26): It will directly affect the coal port transportation capacity.

The safety supervision policy continues: the release of production in major production areas is still restricted.

The demand during the peak season still has support for non electricity demand such as chemical and cement industries.

Winter storage procurement volume increases: The demand for civilian coal in Northeast China and other regions is on the rise.

Overall judgment: The downward space in the market is limited, and prices are expected to stabilize under demand support in late October, with the possibility of a temporary rebound.

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