China’s thermal coal prices climbed to a three-year high as sluggish domestic production growth and disruptions in top exporter Indonesia coincide with an energy rally driven by the US-Iran war.
The benchmark power-station coal price hit 1,004 yuan a ton on Monday, according to the China Coal Transportation and Distribution Association, the first time it’s been at four figures in two years. Prices have risen by a quarter since mid-July
Coal remains China’s main electricity feedstock, accounting for around half of the country’s power mix, even after a rapid buildout of renewable energy over the past few years. Domestic output of the fossil fuel is down more than 3% in the year through August from the same period in 2025 due to a ramp up of safety measures following a deadly mine collapse in Shanxi province in May.
The market had been counting on Shanxi to restore about 31 million tons of annualized production by year-end, but approval of restart applications has lagged behind expectations, according to a local coal news provider. Authorities are likely to maintain a cautious stance ahead of a major Communist Party meeting later this month, limiting the scope for any immediate relaxation of safety controls.
Meanwhile, three weeks of maintenance on China’s main coal rail corridor through Oct. 26 is set to keep prices high.