China Coal Prices Expected to Bottom Out Around Mid-July Amid Summer Peak Demand and Supply Constraints

According to Guotai Haofeng, Kaiyuan Securities, and other institutions, China's coal prices are expected to bottom out around mid-July as summer peak demand combines with stricter mining safety regulations that constrain supply. This week, Qinhuangdao thermal coal (Q5500) fell to 816 yuan/ton, down 30 yuan/ton, while Shanxi pit-mouth coal dropped to 745 yuan/ton. Despite short-term pressure from rainfall and inventory accumulation, the medium-to-long-term supply-demand balance remains tight.

Demand support is strengthening as temperatures rise. China's meteorological authority forecasts four rounds of regional high-temperature processes in July, with national summer peak electricity demand now imminent. On the supply side, Shanxi's raw coal output for January-May 2026 fell 1.2% year-over-year to 536 million tons, while China Shenhua's commodity coal production dropped 4.1% in May, reflecting nationwide impact from intensified safety oversight. This structural supply constraint supports the coal price recovery outlook.