Chinese miners are hoping a recent rally in spot prices for thermal coal will translate into a boost for their annual contracts with power plants next year.
Miners are required to sell 75% of their coal on annual contracts, and the next few weeks will be a pivotal period on those negotiations. The National Development and Reform Commission is pushing miners and utilities to settle such deals by Dec. 13, the China Coal Transportation and Distribution Association said in a Wednesday note, citing an unpublished notice from the regulator.
That makes the recent rally a godsend for miners. Spot prices have surged 36% since June as increased safety inspections reduced output and an October heat wave led to a surge in coal power generation to run air conditioners. Qinhuangdao 5,500-kilocalorie coal is trading at 827 yuan ($116.20) a ton, according to China Coal Resource, the highest level in a year and well above the 675 yuan benchmark for 2025 annual contracts.
Inventory levels across the supply chain are below seasonal levels, which could exert more upward price pressure through mid-December, with a potential peak at 850 to 900 yuan a ton, said Feng Dongbin, vice president at consultant SXCoal, according to a Tuesday research note from Morgan Stanley analysts.
Feng expects total coal imports to fall to 480 million tons in 2026, from a projected 493 million tons this year. Mongolia, one of China’s major suppliers, proposed lifting its exports to 100 million tons next year. Prime Minister Zandanshatar Gombojav made the proposal at a Tuesday meeting in Moscow with Chinese premier Li Qiang.
