China’s coal production dropped by 6.8% in September compared to the same month last year, totaling 385 million tons. While this was an improvement over August, the decline reflects the country’s efforts to curb output due to high inventories and reduced demand from power plants earlier in the year. Thermal power generation also fell by 1.4% year over year in September, but analysts expect a reversal as winter approaches and heating demand rises.
Coal imports also decreased by 5.7% compared to September 2025, though they remained higher than August’s figures. Despite these declines, coal prices in China have surged by 24% since mid-July, driven by tighter supply and strong demand. The rally began in late spring after a major mining disaster in May led to stricter safety inspections and mine suspensions in Shanxi, a key coal-producing region.
Globally, coal demand is rising due to high liquefied natural gas (LNG) prices, which have made the cleaner fuel less attractive. The International Energy Agency (IEA) predicts record coal demand this year, despite ongoing net-zero efforts and LNG capacity expansions. The fourth quarter is expected to see particularly strong coal-buying as peak demand season begins.