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China Burns More Coal Even as Output Slips, Driving Prices Up

 

 

November 21, 2025 - China's electricity generation from thermal fuels such as coal jumped in October while coal output declined, leading to higher prices for both domestic fuel supplies and imports.

Signs point to further price rises as the world's second-largest economy enters the peak season for energy demand, and with Chinese mines hobbled by nationwide output restrictions amid ongoing safety checks, more of that coal will need to come for overseas.
Fossil fuel power generation rose to 513.8 billion kilowatt hours (kWh) in October, up 7.3% from the same month a year earlier and the highest for an October in records going back to 1998. China's thermal power output is mostly from coal with a small amount from natural gas.
Overall electricity generation in October also rose to the highest for three decades for the same month, reaching 800.2 billion kWh, up 7.9% from a year earlier, according to official data released on November 14.
In addition to stronger thermal generation, hydropower output jumped 28.2% from a year earlier, while wind generation rose slightly and solar power dropped on weaker irradiance in the northeast and northwest.
With hydropower generation unlikely to rise further in November and solar and wind entering seasonal downturns, it is likely that coal-fired generation will have to increase for the upcoming winter demand peak.
This may put some pressure on domestic coal mines, which have reported lower production amid Beijing's "anti-involution" campaign aimed at combating overcapacity in several key strategic industries.
China's output of all grades of coal was 406.75 million metric tons in October, down 2.3% from the same month in 2024 and also down from 411.51 million tons in September, according to official data released on November 14.
Robust coal production in the first half of the year means that overall output for the first 10 months of the year is still up 1.5% from the year-earlier period.
However, the restrictions on output in recent months have sparked higher domestic prices, with consultants SteelHome assessing thermal coal at Qinhuangdao port at 835 yuan ($117.44) a ton on Wednesday. 
The price has jumped 37% to a one-year high from the four-year low of 610 yuan a ton hit in June.

Seaborne Gains

Higher domestic prices are dragging up seaborne thermal coal prices from China's major suppliers, Indonesia and Australia.
Indonesian coal with an energy content of 4,200 kilocalories per kilogram (kcal/kg) rose to a six-month high of $48.52 a ton in the week to November 14, according to an assessment by commodity price reporting agency Argus.
Australian 5,500 kcal/kg coal jumped to $86.53 a ton in the week to November 14, an 11-month high and up 32% from the four-year low of $65.72 hit in early June.
The rising prices are likely to prove a boon for coal exporters as China's import volumes are holding up despite the increased cost of cargoes.
China's seaborne thermal coal imports are forecast to reach 28.63 million tons in November, down a touch from October's 29.2 million, according to data compiled by analysts DBX Commodities.
Imports of seaborne thermal coal have recovered since hitting a three-year low of 20.02 million tons in June, according to DBX data, with the four months from August to November all coming in just either side of 29 million tons.
China's stockpiles of coal at coastal ports are estimated by DBX to drop to 63 million tons in November, down from 64.4 million in October and also around 16 million below the level from November last year.