SunSirs: 2026 China Coal Market Trend Analysis

At the recent 2026 National Coal Trading Fair's Coal Market Analysis Session, experts and scholars from coal, securities, trade, and data technology sectors exchanged views and discussed the current coal market landscape and future trends.

Thermal Coal: Prices Will Ultimately Return to Fundamentals After Short-Term “Divergence,” With Annual Price Center Expected to Rise in 2026

Since October 2024, domestic thermal coal prices have experienced significant volatility, yet they have remained within the fundamental supply-demand dynamics of the thermal coal market. Although market sentiment has amplified its influence on price movements, coal prices will ultimately revert to fundamentals after short-term “divergence.”

Data indicates that in the first half of the year, the price of 5500 kcal thermal coal at Qinhuangdao Port fell from RMB770 per ton at the beginning of the year to CNY617 per ton by the end of June, a decline of approximately 20%. At the mine mouth in Datong, the price of 5,500 kcal thermal coal dropped from CNY 631 per ton at the beginning of the year to CNY 467 per ton in early June, a decline of about 26%. In July, coal prices began to rebound from their lows. The price of 5,500 kcal thermal coal at Qinhuangdao Port rose steadily to CNY 830 per ton in November, an increase of about 35%. Current thermal coal prices have already surpassed the levels seen at the beginning of the year.

For the full year, from January to November, the average spot price for 5,500 kcal thermal coal delivered at northern ports was CNY 699 per ton, down 18.7% year-on-year. The average price for annual long-term contracts during the same period was CNY 678.1 per ton, down 3.3% year-on-year. The average ex-mine price of 5,500 kcal thermal coal in Zunike Banner, Ordos, was ¥490 per ton, down 24.1% year-on-year.

The relatively relaxed coal policy environment in the first half of 2025, combined with the cumulative effects of capacity releases and approvals over the past four years, significantly boosted coal production capacity. This drove production growth far exceeding expectations during the period. It wasn't until July that the trend of excessively rapid coal production growth was brought under control.

In 2026, given the limited growth potential of domestic raw coal production and thermal coal imports, thermal coal consumption trends will become a more critical factor influencing coal prices. The annual thermal coal price center is expected to rise, with the coastal market likely to remain active. The overall supply-demand relationship for thermal coal throughout the year may present a pattern of “general balance with periodic tightness.”

Coking Coal: 2025 Price Trend Shows “V-Shaped” Pattern; 2026 May Exhibit “First-Half Bottom Stabilization, Second-Half Volatile Recovery”

In 2025, coking coal and coke prices followed a “V-shaped” trajectory. During the first half, ample coking coal supply drove prices down to domestic coal mine cost levels. In the second half, reduced domestic coking coal production led to price increases, while coke prices rose in tandem due to cost support.

This market trajectory stems from the combined effects of macroeconomic policy adjustments and shifting supply-demand dynamics. On the supply side, the peak growth phase for domestic coke capacity has passed. Latest data indicates coke capacity dropped to 558 million tons in the first half of 2025, a decrease of 17 million tons from the previous year. Concurrently, outdated capacity is being rapidly phased out, with the remaining 27.55 million tons of 4.3-meter coke oven capacity expected to be fully shut down by 2026. Regarding imports, coking coal imports are projected to decline by 5.68% in 2025.

On the demand side, China's crude steel output fell by 2.64% year-on-year in the first nine months of 2025, while pig iron production decreased by 0.79%. The coke market continues to operate under the primary principle of “production determined by demand.”

In 2026, the price range for domestic low-sulfur main coking coal will remain between RMB 1,300 and RMB 1,800 per ton. While bottom prices for various coal types have already emerged this year, constrained by increased imported coal and weak domestic steel demand, the overall trend may show “bottoming out and stabilizing in the first half, followed by fluctuating recovery in the second half.” Structural divergence among coal types will intensify further. Supply tightness for coking and metallurgical coal will persist, while supply for thermal coal-related types remains ample. It is reported that China's coking industry will face stricter policy regulation, particularly the implementation of ultra-low emission policies, which will accelerate the transformation of coking enterprises.

Imported Coal: Shifting from Volume to Quality Focus; Global Supply Remains Ample in 2026

Data from the General Administration of Customs shows that from January to October, China's cumulative imports of coal and lignite reached 388 million tons, down 11% year-on-year. Among these, thermal coal imports totaled 294 million tons, marking a year-on-year decline of approximately 12.64%. Forecasts indicate that China's thermal coal imports this year will contract to 370 million tons, representing a year-on-year drop of 10% to 13% and hitting the lowest level for the same period since 2020.

This contraction stems from three pressures. First, ample domestic supply: National Bureau of Statistics data shows China's raw coal production reached 3.973 billion tons from January to October this year, a 2.1% year-on-year increase. Simultaneously, Xinjiang—a key energy strategic base under development—has expanded its coal transportation capacity, further securing supply. Reports indicate Xinjiang's railways have transported 90 million tons of coal out of the region this year, a 6.9% year-on-year increase.

Second, the substitution effect of new energy sources has intensified. The “China Power Supply and Demand Analysis Report 2025” released by the State Grid Energy Research Institute predicts that by the end of 2025, the country's total installed capacity is expected to reach 3.99 billion kilowatts, with new energy accounting for over 45% of the total. China's new energy installed capacity and power generation share are showing a sustained upward trend. While the proportion of wind and photovoltaic power generation has increased, the cost per kilowatt-hour has achieved a rapid decline.

Finally, the price advantage of imported coal diminished in the first half of the year. Since the beginning of this year, domestic coal prices have continued to decline, while the price advantage of imported coal has steadily narrowed until it inverted. In the second half of the year, as domestic coal prices gradually led the upward trend, the price advantage of imported coal began to re-emerge, reaching a profit margin of CNY 100 per ton from October to November. Additionally, import demand is shifting from a focus on sheer volume to quality, with the market maintaining stable demand for high-calorific, low-sulfur coal.

Looking ahead to 2026, driven by both domestic supply constraints and demand growth, the central price of domestic thermal coal is expected to rise to between RMB 750 and RMB 850 per ton. From a global perspective, although markets such as China, India, and Southeast Asia will continue to contribute incremental demand, overall global coal demand growth is slowing. Coupled with the accumulation of inventories in previous periods, the global market will maintain an overall state of ample supply.

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