Coal Prices Surge 10%, Hitting Highest Level in Over a Year
Jakarta — Coal prices have surged to their highest level in over a year following Israel and the United States striking Iran on Saturday, 28 February 2026.
April coal contracts closed at US$128.7 per ton on Monday, 2 March 2026 trading, up 10%. This represents the highest price since 18 December 2024, spanning more than one year and two months.
The price surge reversed a negative trend that had seen coal prices collapse over six of the previous seven trading days.
The coal price rally has occurred amid escalating tensions in the Iran conflict. The conflict has driven oil prices higher due to the closure of major global oil and gas trading routes, specifically the Strait of Hormuz. Iran’s actions caused oil prices to surge over 7% on Monday, whilst European gas prices soared 50%.
These conditions have prompted many countries to shift their energy sources to coal, driving prices upward.
Beyond geopolitical factors, coal prices have also been supported by developments in China. Chinese coal producers and consumers continue to expand new coal-fired power generation capacity as Beijing prioritises energy security and grid reliability. Investors are also awaiting signals from China’s annual parliamentary meeting for further guidance on demand prospects.
The annual “Two Sessions” will run from 4 March until approximately 11 March, when authorities are expected to release the 15th Five-Year Plan (2026-2030), outlining targets and directions for national development policy.
In the United States, President Donald Trump has moved to strengthen the struggling coal-fired power generation sector, allocating US$175 million in federal funds to modernise six power plants. He has also instructed the US Department of Defence to purchase electricity from additional facilities to support the industry.
In India, coal production recorded strong growth of 18.51% in February 2026 compared with the same month of the previous year. Output from captive and commercial coal mines increased to 20.49 million tonnes (MT), whilst actual dispatch reached 17.72 MT, according to official statements released on Monday.
This strong year-on-year growth reflects sustained operational momentum and progressively increased mining activity across the sector, according to the statement.
For the fiscal year 2025/2026 through February, cumulative coal production from these mines recorded 11.58% year-on-year growth, whilst cumulative dispatch rose 6.78% compared with the same period of the previous year.
Continued expansion in production and uptake reflects strengthened operational efficiency, accelerated capacity increases, and improved coordination throughout the mining value chain. A stable upward trend is evident, showing progressive improvements in both production performance and dispatch.
As part of coal sector reforms, India has transitioned from a previously restrictive model to allocating coal mining blocks through competitive auction processes. India has also shifted from restricting certain end uses to permitting commercial coal sales.
The auction-based regime introduced in 2014 opened private sector participation, though this remained limited to captive use in privately owned facilities. In 2020, the sector was subsequently opened to commercial coal mining by private operators.
Commercial coal block auctions are conducted through two-stage online bidding processes, comprising technical screening and submission of competitive initial price offers in the first stage, followed by a second and final stage where participants submit improved price offers.