2026 thermal coal market to rise first then decline, weak season under pressure but downside limited

This newspaper (chinatimes.net.cn) reporter Li Jiajia and Li Weilai Beijing report

Recently, the international energy market has been turbulent, and the imported coal market is also experiencing underlying fluctuations, but the domestic coal market seems to be “not buying it,” with prices continuing to decline.

Data shows that as of March 12, the “CCTD Bohai Rim Thermal Coal Spot Reference Price” for three specifications—5500K, 5000K, and 4500K—closed at 740, 657, and 568 yuan/ton respectively, down 4, 5, and 4 yuan/ton daily, and down 13, 18, and 17 yuan/ton from previous highs.

Shanghai Steel Union’s Coal and Coke Division thermal coal analyst Zhang Wenwen told Huaxia Times that since 2026, the overall thermal coal market has shown a “rise then fall” trend, with the price center slightly higher than at the end of 2025. During the Spring Festival, supply and demand were temporarily tight, but after the holiday, oversupply led to price fluctuations and a generally weak trend. As demand gradually shifts into the traditional off-season for thermal power after the holiday, with lower daily consumption and higher inventories at power plants, upward price pressure is suppressed. However, limited by import costs, prices have not fallen sharply and are currently in a sustained downward trend.

Rise and Fall After Peak

In the first quarter of this year, coal prices experienced a slight rebound. Wind data shows that Qinhuangdao Port thermal coal (Q5500) prices rose from 685 yuan/ton on January 22 to 753 yuan/ton on March 2, indicating a clear phase of rebound. However, after March, market conditions sharply reversed, and coal prices began a continuous decline.

CCTC Coal Analyst Ren Huiyun told reporters that in February 2026, news of Indonesia’s coal exports shrinking continued to ferment, compounded by Ramadan and the rainy season, which also constrained Indonesia’s coal production and sales. This caused imported coal prices to rise continuously, creating a noticeable inversion with domestic trade coal prices. Meanwhile, coal inventories at northern ports continued to decline, providing strong support for domestic coal prices and driving prices upward domestically.

“After March, domestic coal mine production gradually returned to normal, major railway routes resumed full operation, port resources increased, and port coal inventories continued to accumulate; demand also transitioned into the traditional off-season. After some replenishment post-holiday, most buyers limited procurement, leading to weak demand for market coal and a loosening supply-demand pattern, causing coal prices to adjust downward,” Ren Huiyun explained.

Inventory data also confirms the loose supply and demand pattern. Currently, overall coal inventories remain ample. For example, as of March 13, the combined coal inventories at Qinhuangdao Port, Caofeidian Port, and JingTang Port totaled 25.05 million tons, an increase of 2.15 million tons from the same period last month, a 9.39% rise.

Ren Huiyun said that most coal mines have resumed normal production and sales, with market supply relatively loose. Downstream electricity demand remains weak, with chemical users mainly following their immediate needs.

Zhang Wenwen noted that currently, the latest operating rate of upstream coal mines is 90.5%, close to the same period in previous years, indicating sufficient supply. Downstream power plants have low daily consumption and high inventories year-over-year, leading to weak enthusiasm for market procurement. As a result, the inflow at northern ports continues to exceed outflow, with inventories at nine Bohai ports reaching 26.99 million tons as of March 12, an increase of 870,000 tons week-on-week, with significant accumulation at intermediate links.

However, inventories are not at absolute high levels. It is understood that inventories at the nine northern ports are still about 5 million tons lower than the same period last year.

Limited Impact of Middle East Situation

Notably, contrasting with the continuous decline in spot prices, the secondary market coal index has generally risen. Wind data shows that the coal index surged, breaking out independently, with an increase of 28.44% year-to-date.

Ren Huiyun believes that the recent decline in domestic coal prices is mainly due to insufficient demand support, with the spot market under pressure.

Zhang Wenwen analyzed that spot prices are suppressed by loose domestic supply and demand, high inventories, and weak demand during the off-season. In contrast, the pricing of coal sector stocks more reflects expectations and sentiment about global supply contraction, energy substitution, and geopolitical conflicts, with different logic and cycles.

Recently, the coal sector has risen, possibly because it shares attributes with oil and gas as an energy substitute and benefits accordingly. According to Citic Securities, the energy and resource chain is experiencing a full breakout. Due to the escalation of Middle East geopolitical conflicts, shipping through the Strait of Hormuz is nearly paralyzed, disrupting global crude oil transportation routes, which has driven international oil prices and domestic energy stocks higher in resonance.

However, regarding the impact of the Middle East situation on domestic coal prices, Zhang Wenwen believes the effect is limited. She stated that the tension mainly influences market sentiment and increases shipping costs, weakening the cost-effectiveness of imported coal, which may reduce its supplementary role. Currently, domestic thermal coal production remains stable, and the Middle East has no direct coal supply, with overall demand still constrained by the off-season, so the domestic supply-demand pattern remains unchanged.

From a price support perspective, Ren Huiyun explained that international energy prices remain high, and imported coal still faces a significant price gap with domestic resources, limiting import growth and providing strong bottom support for domestic coal prices. Additionally, the good performance of chemical product prices may support chemical coal prices to be more resilient than thermal coal.

Weakening Off-Season Demand

By mid-March, the heating season in northern regions will gradually end, further reducing civilian electricity loads. In the short term, during the traditional coal off-season, some power plants will conduct routine maintenance on certain units, leading to a significant decrease in coal consumption. Coupled with high inventories at inland and coastal power plants, demand for market procurement of thermal coal is expected to be relatively weak.

Currently, the domestic coal market faces multiple bearish factors: first, after major meetings, coal supply at production sites will return to high levels; second, although procurement demand from non-electric sectors is expected to improve, it cannot offset the sharp decline in power terminal consumption after the heating season; third, inventories at northern ports still have room to grow; fourth, the substitution effect of non-fossil energy generation on thermal power is expected to strengthen.

Industry forecasts suggest that coal prices in March mid-to-late period will continue to be under pressure. However, given the significant uncertainties in the international market and expectations of reduced coal imports, the pressure of oversupply domestically may ease, limiting the downward space for domestic market coal prices.

Ren Huiyun also believes that as demand transitions into the off-season, support remains insufficient, and coal prices may still face downward adjustment. But considering the unclear international situation and high international energy prices, deep declines in domestic coal prices are likely limited.

Zhang Wenwen predicts that overall, thermal coal prices will continue to fluctuate weakly. Due to the combined effects of the off-season for thermal power and increased renewable energy generation, demand for thermal coal is unlikely to show significant growth, and the market will operate weakly with slight price pressures. However, under the policy of price stabilization and support, large fluctuations are limited, and prices are expected to mainly oscillate at low levels.

Editor: Li Weilai Chief Editor: Zhang Yuning