Coal Prices "Dead", Global Market Forces Divided
Coal prices remained unmoved. According to Refinitiv, coal prices closed at US$139.3 per tonne on Monday (6/4/2026), remaining stagnant.
The stagnation in coal prices is due to a tug-of-war of factors. On one hand, many countries are once again hunting for coal due to the surge in oil prices. However, demand in several countries is weakening.
Vietnam has proposed increasing coal production capacity by up to 15% to maintain energy supplies amid rising global uncertainties.
Vietnam’s Ministry of Agriculture and Environment has proposed allowing domestic coal producers to increase production by a maximum of 15% above licensed capacity.
This proposal arises amid escalating geopolitical tensions, particularly in the Middle East, which continue to disrupt the global energy market. Key transport routes such as the Strait of Hormuz face potential risks, triggering concerns over supply disruptions.
Domestically, electricity demand continues to rise, while efforts to secure imported fuel still face uncertainties due to market volatility, logistical constraints, price pressures, and supply risks.
The ministry also proposes adjusting mineral mining permits to allow an increase in coal production capacity by a maximum of 15% from existing licensed capacity.
The ministry states that domestic coal remains a crucial base energy source, essential for maintaining the stability of the electricity system, supporting industrial production, and ensuring national energy resilience.
If approved, this policy is expected to help meet coal needs for power plants and major industries, while strengthening energy resilience.
Additionally, this policy would enable more optimal utilisation of existing mine capacities—including equipment, technology, workforce, and infrastructure—thus improving efficiency and accelerating the conversion of capacity into actual production.
China’s Market Cooling
China’s coal market is once again showing unusual dynamics. Amid weak seasonal demand, declining stocks at ports are acting as a buffer to prevent prices from falling further.
The latest data shows that thermal coal stocks at northern China’s ports have continued to decline in recent times. This decline is not driven by a surge in demand, but by supply-side disruptions.
One main factor is the disruption in distribution, including maintenance on major rail lines transporting coal from mines to ports. This situation has reduced the supply entering the ports.
On the other hand, coal demand is in a weak phase. China is currently in a transitional period, not the peak electricity consumption season like summer or winter.
As a result, purchases by power plants tend to be limited, while trading activities are also relatively quiet.
However, interestingly, coal prices are not experiencing a sharp decline. The drop in port stocks serves as a “buffer” that holds back downward price pressure.
This means that although demand fundamentals are weak, supply limitations keep prices stable.
The current market conditions reflect a tug-of-war between supply and demand. Demand is weakening due to seasonal factors, while supply to ports is disrupted by logistical issues.
This combination results in a somewhat stagnant market. Prices lack a catalyst for significant increases but are not weak enough for sharp declines.
A similar phenomenon is seen in China’s coking coal market. The market shows mixed signals between supply disruptions and weak demand.
On one side, there is tightening supply in several regions due to mine inspections, accidents, and temporary operational halts.
However, on the other side, demand from downstream industries such as steel mills and coke producers is weakening. This reflects steel sector activities that have not fully recovered.
Additionally, market sentiment is pressured by weakening futures prices, making market participants tend to hold back on purchases.
In theory, supply disruptions should push prices up. But in the current conditions, weak demand is more dominant.
As a result, coking coal prices are unable to strengthen significantly and tend to move stagnantly, even with a weakening bias.