(1) Supply side: Coal supply is relatively loose and expected to maintain a relatively high level
In terms of domestic production, the national raw coal production from January to July 2025 was 2.78 billion tons, an increase of 100 million tons or 3.8% year-on-year. Among them, the production of raw coal in July was 380 million tons, a year-on-year decrease of 14.88 million tons or 3.8%, with an average daily output of 12.29 million tons. In July, rainstorm, flood, safety supervision and other factors had a negative impact on coal mine production in some regions, and domestic coal production declined slightly year on year. In the later stage, major coal producing provinces and regions will continue to promote stable coal production and supply. China's coal production is expected to maintain a relatively high level, but there will be more major activities in September and October, which will increase the pressure on coal production safety. It is expected that the release of coal mining capacity in some areas may be constrained to some extent.
In terms of imported coal, China's cumulative coal imports from January to July 2025 were 260 million tons, a year-on-year decrease of 38.48 million tons or 13%, continuing the negative growth trend. Among them, imports in July were 35.61 million tons, a year-on-year decrease of 10.6 million tons or 22.9%. Since July, under the influence of the peak season for coal consumption in summer, domestic and international coal prices have rebounded at a low level, and the competitive advantage of imported coal has significantly improved. China's monthly coal imports have grown rapidly month on month. In the later stage, the price advantage of imported coal will continue to be maintained, and the demand for imported coal procurement by power plants will continue to improve. However, due to the large-scale demonstrations and protests in the main source countries of imported coal, the uncertainty of the imported coal market has increased. Under the risk aversion sentiment, it cannot be ruled out that the import volume will be affected in the later stage.
In terms of transportation, from January to July 2025, the national railway has sent a total of 1.196 billion tons of coal, including 816 million tons of thermal coal. The coal stored in railway direct power plants continues to be at a high level, effectively ensuring stable energy supply. However, it is worth noting that some railway lines have recently narrowed their shipping preferential policies, resulting in a decrease in the willingness of traders to ship. After September, the freight rates of coal railways in Xinjiang will undergo significant adjustments, with multiple railways and platforms once again adjusting their coal freight rates. Compared to previous prices, the discount rate will further shrink, which means that downstream coal shipping costs will rise again and may have a certain impact on the market supply rhythm.
(2) Demand side: As the peak summer season comes to an end, seasonal coal demand shifts from rising to falling
From January to July, the national fixed assets investment increased by 1.6% year on year; Excluding the investment in real estate development, the national fixed assets investment increased by 5.3%. Looking at different fields, investment in the manufacturing industry has grown rapidly: the construction of a modern industrial system has been solidly promoted, and investment in the manufacturing industry has grown rapidly. From January to July, manufacturing investment increased by 6.2% year-on-year, with a growth rate 4.6 percentage points higher than total investment, driving a 1.5 percentage point increase in total investment. Increased contribution rate of infrastructure investment: With the accelerated issuance and use of local government special bonds and ultra long term special treasury bond, the construction of "dual" projects accelerated, and infrastructure investment grew steadily. From January to July, infrastructure investment increased by 3.2% year-on-year, with a growth rate 1.6 percentage points higher than total investment; The contribution rate to the overall investment growth was 43.0%, an increase of 6.0 percentage points from the first half of the year. However, the growth rate of real estate sales investment continues to decline: from January to July, the national real estate development investment was 5358 billion yuan, a year-on-year decrease of 12.0% and an expansion of 0.8 percentage points from January to June.
At the same time, foreign trade has shown strong resilience. Faced with the complex and ever-changing international environment, various regions and relevant departments have increased their efforts to stabilize foreign trade. Foreign trade enterprises have actively expanded their foreign trade space, and the import and export of goods have continued to grow. In July, China's total import and export of goods increased by 6.7% year-on-year, an acceleration of 1.5 percentage points from the previous month.
From the perspective of major coal consuming industries, the demand for electricity coal has entered the off-season. The beginning of autumn has passed, and although the temperature is still high, with wind power output gradually entering the peak season and hydropower recovery, it is expected that the demand for thermal power and coal will enter the off-season from September to October. In the steel and building materials industries, after the high temperature period, the construction industry will usher in the "Golden September and Silver October" peak season and rush to work, coupled with the acceleration of key construction projects in multiple provinces. After the weather clears up, the demand for steel and cement will show a seasonal rebound. However, the year-on-year decline in the newly started housing area in July widened to -15.4%, and the overall recovery space is limited. The demand for coal in the chemical industry continues to grow. The added value of the chemical industry continues to grow rapidly, with chemical 名媛直播 such as fertilizers and ethylene growing rapidly. The new coal chemical industry is steadily developing, which is expected to drive the continued growth of coal demand in the chemical industry.
Overall, in July, some major economic indicators fell slightly due to short-term factors such as seasonality, but the national economy remained stable overall. Despite the complex domestic and international situation, China's economy has shown strong resilience and vitality. From the perspective of the main engine driving coal demand, the growth rate of real estate sales investment continues to decline, and the increase of wind and solar power generation is not conducive to coal demand. However, fixed assets investment continues to expand, manufacturing investment grows rapidly, and foreign trade exports grow faster than expected, which is conducive to supporting coal demand. It is expected that stable macroeconomic growth will be conducive to driving coal demand in the later stage, but coal consumption will enter the off-season, and the total amount may slightly decrease.
(3) Market outlook: Short term price pressure, expected to gradually stabilize in the later period
Overall, the current coal market is characterized by loose supply and weak demand. On the one hand, domestic production remains relatively high and the supply side has strong guarantee capabilities; On the other hand, after the peak summer season, coal consumption for electricity has entered the traditional off-season. Although there is a temporary demand for replenishing inventory in the non electricity industry, the overall driving force for coal consumption is limited. It is expected that there will still be some downward pressure on the price of thermal coal until early September.
However, the possibility of a deep price drop is unlikely, mainly constrained by the following factors: firstly, the complex and ever-changing international situation, with large-scale demonstrations and marches in major coal importing countries, exacerbating the uncertainty of imported coal supply, and some potential demand will shift towards domestic coal; Secondly, some railway freight discounts have been cancelled or reduced, and the cost of shipping to the port continues to invert, seriously suppressing the willingness of traders to ship, resulting in the ineffective recovery of coal imports from northern ports and the continuous depletion of inventory. This has led to a shortage of high-quality and tradable coal resources in the port market, and structural support is still present. Once the market price drops too quickly, the existing tight supply-demand balance will be disrupted. Due to cost support and limited available resources, market resistance is expected to significantly increase, forming a buffer against the downward trend. In mid to late September, as some coal mines moderately tighten their supply due to safety supervision and completion of production tasks, and end users carry out stocking purchases for the National Day holiday, especially power plants will increase their inventory appropriately to cope with fluctuations in electricity demand during the holiday, which will provide some support for coal prices. It is expected that the market supply and demand relationship will gradually become balanced, and coal prices are expected to stop falling and enter a narrow range oscillation stage.
