Coal Prices Surge for Three Days, but Threats Loom
Jakarta, CNBC Indonesia - Coal prices continued to climb amid rising oil prices and strong demand. However, ample supply could threaten the sustainability of the coal price increase.
On Monday (20/07/2026), coal prices strengthened by 0.30% to US$133.75 per ton. This increase extends its positive trend, gaining 2.5% over the last three days.
US crude oil (WTI) closed up 0.9% at US$83.23 per barrel, while the global benchmark Brent crude strengthened by around 1.3% to US$89.22 per barrel. Coal and oil are substitutable commodities, so their prices influence each other.
Coal prices also rose amid increased demand due to heatwaves. However, demand has moderated compared to last week.
India confirmed that coal supplies for power plants remain secure amid a surge in electricity demand due to hot weather and a weak monsoon season. As of 12 July, coal stocks reached 42.8 million tonnes, sufficient to sustain plant operations for 14 days at an 85% utilisation rate. India’s peak electricity demand last week reached 270.1 GW and is expected to hit 280 GW this year.
Despite the continued growth of renewable energy, coal remains the backbone of India’s electricity supply, contributing 69.5% of power generation from April to June. The government is also continuing to strengthen coal supplies and add generation capacity to anticipate high electricity needs.
The prospect of rising thermal coal prices at Chinese ports is also beginning to lose momentum, even though electricity demand is increasing during the peak summer season. Abundant supply and high coal stocks at ports are making buyers cautious, making it difficult for price increases to continue.
Market participants noted that selling interest is starting to increase, while buying activity remains limited. This condition offsets the positive sentiment from safety inspections at several coal mines in China and expectations of higher electricity consumption due to summer heatwaves.
High coal inventories at northern Chinese ports are the main factor limiting price increases. Although temperatures are rising and electricity demand is expected to increase, large stockpiles mean power utilities are in no rush to make large-scale purchases.
Under these conditions, the market expects thermal coal prices to move in a limited range in the near term, unless there is a larger supply disruption or a surge in electricity demand that exceeds expectations.