After Five Days of Stagnation, Coal Prices Stage a Frightening Rebound

Jakarta, CNBC Indonesia - Coal prices finally rebounded after plunging for five consecutive days. According to Refinitiv data, coal prices in trading on Wednesday (8/7/2026) closed at US$130.85 per tonne, surging 2.27%. Yesterday’s closing price was the highest since 23 June 2026. This rally broke the negative trend for coal, which had fallen 1.2% over the previous five days. The surge in coal prices was supported by oil prices and demand. In trading on Wednesday, Brent futures closed up 5.43% at US$78.19 per barrel, while West Texas Intermediate (WTI) strengthened 4.37% to US$73.52 per barrel. Oil and coal are commodities that influence each other as they can be substitutes. Coal demand also remains high. Quoting Reuters, Vietnam is considering building more coal-fired steam power plants (PLTU) to ensure domestic energy needs are met. This step is being taken amid the Iran war, which is increasingly complicating the development of liquefied natural gas (LNG) infrastructure in the country. Vietnam, one of the largest manufacturing hubs in Southeast Asia, is seeking to increase power generation capacity to support its rapid economic growth. The country also remains focused on developing renewable energy and LNG. However, the Vietnamese government stated that the ongoing conflict in the Middle East has disrupted LNG supply security. “In recent times, the developing conflict in the Middle East has affected LNG supply security, creating a need to strengthen energy resilience,” the Vietnamese government said in a statement on Wednesday (8/7/2026). Consequently, the government is opening the possibility of revising the National Power Development Plan by increasing the share of coal-fired power plants in the energy mix. Previously, Vietnam targeted having LNG-based power plants with a combined capacity of 22.5 gigawatts (GW) by 2030. However, realisation has only reached about 7.3% of that target, mainly due to regulatory hurdles and a lack of investor interest. The Iran war has also heightened concerns over LNG supply security. Under the current plan, Vietnam targets installed power generation capacity of 183-236 GW by 2030. Of that total, coal-fired power plants are projected to contribute 13.1%-16.9% of the energy mix, while LNG contributes 9.5%-12.3%. Data from state electricity company Vietnam (EVN) shows electricity production in the first half of 2026 reached 171.5 billion kilowatt-hours (kWh), up 9.8% compared to the same period last year. Of that total production, 54.5% still came from coal-fired power plants. Indonesian seaborne coal exports fell in June 2026, dropping back below the 40 million tonne level. Nonetheless, the volume remained significantly higher than the same period last year. Based on Kpler vessel tracking data, Indonesian coal exports in June reached 39.22 million tonnes, up 17.04% compared to June 2025’s figure of 33.51 million tonnes. However, on a monthly basis, exports fell 1.97% from 40.01 million tonnes in May 2026. Exports to Asia reached 38.65 million tonnes, or about 98.5% of total shipments. This figure rose 15.08% year-on-year but fell 2.59% compared to May. China remained the main destination for Indonesian coal exports with a volume of 16.52 million tonnes, soaring 50.79% compared to last year, although down 2.54% from the previous month. Meanwhile, exports to India reached 6.49 million tonnes, down 9.31% year-on-year but up 4.37% month-on-month. Shipments to the Philippines increased to 3.32 million tonnes, while exports to Vietnam reached 2.58 million tonnes and to Malaysia amounted to 2.37 million tonnes. Cumulatively, Indonesian coal exports throughout the first half of 2026 reached 227 million tonnes, a slight decrease of 0.44% compared to the same period last year. On the other hand, exports to China during the first six months of the year actually rose 6.21% to 87.49 million tonnes. The thermal coal market at mine mouths in China remains sluggish, although some mines are starting to attempt limited price increases. Coal demand is still weak, keeping mine-mouth prices under pressure. Coal inventories at power plants remain high, while electricity consumption is not yet strong enough to draw down stocks. Daily coal consumption at six major coastal power generation groups in China was recorded at 786,300 tonnes per day, down 7.3% compared to last year. High hydropower output due to heavy rainfall in the Yangtze River region and the impact of Typhoon Maysak further reduced the need for coal-fired power generation. Because stocks remain abundant, power plants prefer to meet their needs through long-term contracts and only purchase spot coal if absolutely necessary. This keeps demand in the spot market weak. As a result, coal stocks at mines continue to increase and many mining companies are forced to lower prices to boost sales. In Ordos (Inner Mongolia), coal prices fell by 10-20 yuan per tonne, while price cuts also occurred in Yulin (Shaanxi) and Shanxi.