China’s thermal coal prices have climbed to a three-year high, with the benchmark power-station coal price reaching 1,004 yuan ($150) a ton on Monday, the first four-figure reading in two years. Prices have jumped by a quarter since mid-July, as sluggish domestic output and disruptions in top exporter Indonesia collide with an energy rally fueled by the US-Iran war.
Coal remains China’s primary electricity feedstock, comprising around half of the national power mix despite rapid renewable expansion. Domestic production is down more than 3% year-on-year through August, hampered by tightened safety measures after a deadly mine collapse in Shanxi province in May. Authorities are expected to keep safety controls strict ahead of a major Communist Party meeting later this month.
Further pressure comes from three weeks of rail corridor maintenance through Oct. 26 and sharply reduced Indonesian shipments, as Jakarta curbs output to lift prices. A drought tied to El Niño has also lowered river levels, forcing barges to cut loads. With winter consumption typically rising and liquefied natural gas prices surging, relief remains distant.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing