Coal Prices Plunge Over 3% Due to India's Surging Production
Coal prices remained under pressure throughout the week, triggered by negative sentiment from India, the world’s second-largest consumer.
In trading on Friday (7/8/2026), the global coal price for the September 2026 contract closed down 0.19% at US$129.5 per tonne. However, over the course of the week, global coal prices plunged 3.36% on a point-to-point basis.
The decline in coal prices was triggered by a 7.51% year-on-year (yoy) surge in India’s coal production to 69.75 million tonnes in July 2026, which increased domestic supply and reduced the need for imports.
In addition to rising production, coal distribution to power plants and industrial consumers also increased significantly. India’s coal shipments jumped 17.34% compared with the previous year.
On the other hand, coal demand in China began to improve as hotter weather and increased use of air conditioning pushed up electricity consumption. This factor helped prevent a deeper price decline.
Coal prices at northern Chinese ports continued to strengthen, supported by tighter supply and rising electricity demand during the summer. However, the price rally began to lose momentum as real demand had not yet shown significant strengthening.
Weather that was not as hot as expected in several parts of China meant electricity consumption and spot coal purchases by power plants were not as high as market expectations.
At the same time, shipping activity remained sluggish, reflected in the reduced number of vessels queuing for cargo at major northern Chinese ports.
Pressure also came from abundant coal stockpiles. Inventories at southern ports such as Guangzhou continued to rise, while stocks at power plants remained at high levels. This situation meant utility companies were not yet compelled to make aggressive additional purchases.
Meanwhile, from the United States, it was reported that in the second quarter of 2026, coal transport volumes by two major railway companies in the eastern US, CSX and Norfolk Southern, increased by 5% and 4% respectively.
However, coal shipments for the domestic market actually fell by 2% and 8%, while export volumes jumped by 12% and 25%.
This data indicates that growth in US coal transport was driven more by overseas demand than by domestic electricity sector consumption.
The US government has issued various policies to support the coal industry, including relaxing regulations and attempting to delay the closure of coal-fired power plants.
However, coal consumption for power generation from January to May remained lower than the same period the previous year. This occurred because natural gas and solar energy continued to replace coal’s role in the power generation mix.