China Sparks Global Concern as Coal Prices Surge Again
Jakarta, CNBC Indonesia – Coal prices edged higher again.
According to Refinitiv, coal closed at US$152.55 a tonne on Wednesday (28 October 2026), up 1.33%.
The rise ended a two-day downward trend.
Prices were supported mainly by news from China.
Shanghai Metals Market reported that China’s coking coal market is expected to shift from a slight surplus in 2025 to a deficit in 2026.
A greater contraction in domestic supply than in demand could push prices higher, although weak consumption is still expected to limit gains.
In a moderate scenario, domestic Chinese coking coal production is projected to fall from 490 million tonnes in 2025 to 440 million tonnes in 2026, according to an analysis published by Shanghai Metals Market (SMM) on Wednesday (28 October 2026).
The decline is being driven by stricter enforcement of mine-safety rules to curb overproduction, significantly reducing domestic supply.
Imports are forecast to rise only slightly, to 125 million tonnes. Growth is constrained by periodic inspection restrictions and delays in coal movements through Mongolian ports, meaning imports are not expected to offset the fall in domestic production.
On the demand side, coking coal consumption is projected to fall to 569.63 million tonnes as production of hot metal and coke weakens. However, demand is expected to decline less sharply than supply.
This is expected to create a deficit of about 5.58 million tonnes in 2026. The market could shift from slight stock accumulation in 2025 to inventory drawdowns in 2026, with supply and demand becoming increasingly tight.
The situation provides a basis for higher coking coal prices. However, because the projected deficit is relatively small, the price outlook will continue to depend on how strictly China enforces mine-safety rules and whether coal flows from Mongolia remain smooth.
Meanwhile, weak demand is expected to limit further price rises.
Mongolian coal transport route to China closed, disrupting exports
Mongolia’s Tavantolgoi–Manlai–Khangi land transport route was closed from 7pm on 27 October because road damage had not been repaired to government standards. The closure could disrupt coal shipments to China through one of Mongolia’s main export routes.
Mongolia’s Ministry of Road and Transport had previously found severe damage along about 250 kilometres of the 477-kilometre concession route. The road will remain closed until repairs are completed.
However, the impact on coking coal supply is expected to be limited because most Mongolian primary coking coal is transported through the Ganqimaodu route, which remains open and is handling an average of more than 710 lorries a day.
China imported 12.76 million tonnes of Mongolian coal through Mandula port between January and September 2026, more than three times the amount recorded in the same period last year.