Coal Prices Plunge for Three Days, Aid from China and India in Vain
Jakarta, CNBC Indonesia - Coal prices fell for three consecutive days amid the collapse in energy prices.
Coal prices closed on Wednesday (25/3/2026) at US$137.55 per tonne, down 0.53%. This weakening extends the negative trend in coal prices, which have fallen 6.1% over the last three days.
Coal prices eased in line with the weakening of global energy prices, from oil to natural gas.
Crude oil prices fell 2.2% in Wednesday’s trading, while natural gas prices dropped 1.98%.
Energy prices weakened after US President Donald Trump stated there were negotiations between the US and Iran.
Coal, oil, and natural gas are complementary commodities, so their prices influence each other.
Coal prices continued to fall despite positive news from India.
India delayed for one year its plan to reduce output from coal-fired power plants when solar power production is high.
The regulator is still seeking ways to compensate for the additional costs from the retrofitting process (technical modification), according to documents reviewed by Reuters.
Analysts say the lack of flexibility in coal-fired power plants as India expands renewable energy capacity risks wasting green investments, increasing compensation costs, and driving up emissions from avoidable coal use.
This step comes as India, the world’s second-largest coal user, is instead limiting solar power output due to a lack of dedicated transmission networks. Meanwhile, coal-fired power plant capacity faces operational constraints.
Estimates from energy think tank Ember suggest that solar power producers asked to curtail output because coal plants cannot reduce production could receive compensation of up to US$76 million for eight months until December.
Costs that will ultimately be passed on to consumers.
Government officials say the one-year delay is due to the absence of compensation rules for coal plants for additional maintenance and retrofitting costs needed to lower the minimum operating level from 55% to 40%, as stated in the minutes of the 16 January meeting.
Retrofitting coal plants is estimated to raise electricity tariffs by only INR 0.28 to 0.60 per kilowatt-hour, compared to INR 5.76 to 6.04 for battery storage. This makes coal flexibility at least 10 times cheaper.
Meanwhile, from China, it was reported that coking coal producers in China continue to record strong sales, even though they have raised offer prices. Solid demand, especially from the steel sector, keeps the market active and prices tending to rise.
Chinese steel mills remain active in buying to maintain production. Demand for coking coal is also high as it is used in the steel-making process (blast furnace), while stocks at mills are relatively low, triggering aggressive buying.
Thermal coal prices at the mine-mouth level in China are also rising quite rapidly, driven by improving demand and relatively tight supply. However, this rise is starting to face “resistance” from buyers and government policies, so the potential for further increases may be limited.
The rise is triggered by improving electricity demand and increasing industrial activity.
Utilities (coal-fired power plants) are also starting to increase purchases to secure supply. There are actors pushing electricity consumption and accelerating coal absorption in the domestic market.
Currently, inventories at power plants and ports are not too high, so additional purchases are made to avoid supply shortages.
However, power companies are starting to reject further price increases. This is because the Chinese government is known to be sensitive to coal price surges due to their impact on inflation and electricity tariffs.
From Germany, the German Ministry of Economic Affairs and Energy assesses that returning coal-fired power plants currently in reserve status to the market could be “problematic”, even though the Iran war has impacted energy prices.
Gas prices surged after the Iran war broke out at the end of February 2026, causing concern in Europe.