Blazing Coal Prices See China's Electricity Become a Lifeline

Jakarta, CNBC Indonesia - Blazing coal prices rose to a two-week high as oil prices remained elevated. Refinitiv data shows coal prices on Monday trading (18 May 2026) closed at US$138.5 per tonne, up 1.1%. The previous day’s price was the highest in two weeks. The rise in coal prices is supported by still-high oil prices and demand. Coal and oil are commodities that influence each other. West Texas Intermediate futures rose about 3% and settled at US$108.66 per barrel, while Brent Crude climbed more than 2% to US$112.10 per barrel. Latest data show electricity generation from thermal plants, predominantly coal-fired, rose by 3.6%. China is now among the countries increasing thermal-power generation amid tightening global gas supplies due to the Middle East crisis. The rise in production comes amid a decline in China’s coal production. China’s coal production fell 1% year on year in April. National Bureau of Statistics data also show coal supply and demand remain tight. April coal production was 385.63 million metric tonnes, down from a record high of 440.62 million tonnes in March. In the first four months of this year, China’s coal production reached 1.58 billion tonnes, down 0.1% from the same period in 2025. China continues to expand coal-fired power generation to compensate for low wind speeds and several nuclear plants undergoing maintenance. China also still holds abundant coal reserves, and power plants have been asked to keep stocks up ahead of summer when electricity demand is expected to surge. China’s coal imports have fallen this year, but exports have also declined in recent weeks as Beijing seeks to ensure secure electricity supplies amid subdued LNG imports due to high prices and uncertainty in global energy markets because of the Iran conflict. Despite aggressively expanding renewable energy and being the world’s largest investor in the sector, China remains heavily dependent on coal to meet electricity needs when renewables weaken. Last year, China accounted for 78% of all newly commissioned coal-fired power capacity globally. According to Global Energy Monitor, China also controlled 86% of the world’s coal-fired capacity under construction and scheduled to operate this year.