Coal Prices Plunge: China Engages in Panic Buying, Stockpiling Heavily

Jakarta, CNBC Indonesia - Coal prices plunged after surging over the previous three days. On Monday (23/3/2026) trading, coal prices closed at US$140.5 per tonne, down 4.1%. This weakening broke the positive trend of coal prices, which had risen 8.7% over the prior three days. Last Friday, coal prices reached US$146.5 per tonne, the highest since 17 October 2024. The coal price plunge aligned with the weakening of global energy prices. Oil prices fell 10% while European natural gas prices dropped 6% in Monday’s trading. Coal is a substitute commodity for oil and natural gas, so their prices influence each other. Energy prices fell after US President Donald Trump ordered a five-day pause on US attacks on Iranian energy infrastructure, following talks aimed at ending the conflict. Trump stated that the discussions were productive and would continue throughout the week, raising hopes for de-escalation. However, Iranian media denied any contact with Washington. The energy market has experienced volatility since the war began, with the Strait of Hormuz largely blocked, disrupting major supply flows. Supply concerns persist after damage to the Ras Laffan complex in Qatar reduced LNG capacity, while global production is expected to remain limited. European gas storage levels are also lower than last year (28.5% filled compared to 33.8% a year ago), adding to ongoing supply risks. Coal Heats Up in China The coking coal market in China suddenly heated up following a wave of aggressive buying actions from industry players, driving futures prices to surge. This spike signals a sharp shift in supply-demand dynamics. The price increase was triggered by rising activity in China’s steel factories, which are ramping up production. Along with that, demand for key raw materials like coking coal has also surged. Industry players moved quickly to secure supplies amid market uncertainties. In addition to real demand, large-scale restocking actions have become a major driver. Many factories and traders are racing to replenish stocks due to fears of future supply disruptions. As a result, the market is experiencing a kind of “panic buying” that is accelerating the price surge. From the supply side, pressures have not eased. China’s domestic production is not yet fully stable, while risks of supply disruptions still loom. On the other hand, import flexibility is also limited, making the market increasingly sensitive to demand spikes.