Coal Prices Surge Dramatically in a Week, Once Again Due to China
The Newcastle coal contract NCFMc2 ended trading on Friday (17/7/2026) at US$133.35 per tonne, up 3.57% from the previous week’s close of US$128.75 per tonne. Prices moved in a limited range around US$130-US$131 early in the week, but buying picked up in the last two days, pushing coal to its highest closing position of the week.
The strengthening of coal was mainly supported by developments in China. A heatwave drove the country’s electricity demand to a record of around 1.55 billion kilowatts in mid-July. Power plant coal requirements increased while China’s domestic production remains overshadowed by mine safety inspections following a major accident in Shanxi. These conditions prompted China to increase purchases from the international market.
China’s coal imports in June reached 42.78 million tonnes, surging 28.6% compared to May and 29.5% year-on-year. As the world’s largest coal consumer, China’s increased buying significantly affects cargo availability in the Asian market. Demand from Japan and South Korea also supported high-calorific coal such as Newcastle, as expensive Asian LNG prices led these countries to maintain coal as a safeguard for electricity supply.
The picture from India is somewhat different. A heatwave and weak rainfall increased the use of coal-fired power plants, with consumption in June reaching its highest level since 2023. However, India is trying to meet this need through domestic production. India’s coal imports fell nearly 13% year-on-year in April, and thermal coal imports during January-May were at their lowest level in four years. This means China is pulling more coal from the global market, while India has not yet aggressively competed for imported supply. This condition is pushing prices up, but not enough to create a spike like the one seen in mid-June.
From the supply side, the trade policy of Indonesia, the world’s largest thermal coal exporter, remains a factor to watch. Changes in export governance could add uncertainty, although no additional export restrictions have emerged so far. With the combination of high Chinese electricity demand, domestic production disruptions, and expensive Asian LNG, Newcastle coal prices have the opportunity to continue rising towards US$135-US$137 per tonne in the near term. If China continues to increase imports and hot weather persists, prices could test US$140 per tonne, although high port stocks in China and weak Indian import demand may make the strengthening gradual.