Coal Prices Drop After Three-Day Surge: Is China the Culprit?
Coal prices have levelled off alongside falling oil prices and holidays in China. According to Refinitiv, coal prices closed at US$ 146.4 per tonne in Tuesday’s (29/09/2026) trading, representing a 0.64% decline.
This weakness breaks a positive trend where coal prices had strengthened for three consecutive days. Brent crude fell 2.6% to US$ 102.59 per barrel, while WTI dropped 3.5% to US$ 89.38 per barrel. Despite this correction, Brent is still heading towards a monthly increase of approximately 13%, and WII by around 4%.
Coal prices also weakened due to falling demand during the Mid-Autumn Festival holidays in China, which run from 25 September to 30 September 2026.
China Opens Dedicated Guizhou-Sichuan Coal Railway Line
A dedicated coal transport train service from Guizhou to Sichuan, China, began operations on 17 September 2026. This line transforms coal distribution, which previously relied on trucks, into a combination of road and rail transport.
Coal is transported via trucks from Jinsha, Guizhou, to Longshanzhen East Station, before being sent directly by train to power plants in southern Sichuan. This new system is expected to cut logistics costs by 3%-5% and increase transport capacity by 200%-300%, while simultaneously strengthening distribution resilience against extreme weather.
Guizhou possesses proven coal reserves of over 500 million tonnes, whereas Sichuan still relies on external supplies to meet its energy requirements. The operator, Shudao Railway Operation Group, plans to expand the service to ensure inter-provincial coal deliveries become more routine and large-scale. This move is part of China’s strategy to shift bulk goods transport from roads to railways to reduce logistics costs and bolster energy supply security.
Meanwhile, peak electricity demand in India fell to 218.8 gigawatts (GW) on Sunday due to rain in several regions. However, by Monday, demand surged again to 236.34 GW. India’s electricity consumption has grown by more than 14% throughout September, driven by cooling and irrigation needs amidst below-normal monsoon rainfall.
On the other hand, coal supply is under pressure as rain disrupts transport from mining areas. Coal stocks at domestic production-based power plants were recorded at 19.2 million tonnes, while imported coal stocks stood at only 2.55 million tonnes, sufficient for approximately 8-9 days. Out of 190 coal-based power plants, around 80 units are in a critical stock condition, with inventories below 25% of normative levels.