India and China Drive Coal Prices Higher Again
Global coal prices surged in the most recent trading session of the week, supported by supply constraints in India and rising prices in China.
According to Refinitiv data from Friday (2026/08/28), global coal prices for the October 2026 contract closed up 0.18% at US$139.75 per tonne. Throughout the week, global coal prices rose by 1.08% point-to-point.
Supportive sentiment stems from India, where 45 coal-fired power plants (PLTU) reached critical coal stock levels as of 25 August 2026. This figure has jumped from 31 plants at the end of July.
The 45 plants in question hold reserves below 25% of normal requirements, or stocks insufficient to generate electricity for three consecutive days.
This condition arises as electricity demand increases due to a strong El Niño, while supply is disrupted by monsoon rains. Of these plants, 40 rely on domestic coal. Heavy monsoon rains in several coal-producing states, such as Odisha, Jharkhand, and Chhattisgarh, have disrupted mine production and fuel distribution.
Commodity consultancy BigMint noted that coal stocks at Indian power plants fell by 19% throughout August to 30.95 million tonnes, which is only sufficient for approximately 10 days of operation. India’s thermal power plants depleted coal stocks sharply during the first 23 days of August as consumption continued to outpace supply.
This situation occurs as electricity demand rises due to hotter-than-usual weather associated with El Niño. India also recorded rainfall 12% below normal throughout the monsoon season.
“Coal supply is running tight, while electricity demand is increasing, particularly for air conditioning,” said an official from India’s largest power company, NTPC, as quoted by Reuters on Sunday (2026/08/30).
The Indian government has even requested several power plants to postpone plant maintenance until the coal supply situation becomes clearer.
Meanwhile, in China, reports indicate that thermal coal prices at major northern transshipment ports have risen to their highest levels in over two years. The increase is primarily driven by continued tight supply and rising costs. The rise in domestic port coal prices has subsequently spread to China’s imported coal market, providing support to import prices.
The price increase is not solely due to surging electricity demand; the supply side has become a dominant factor. Sxcoal reported on the same day that China’s thermal coal production in July 2026 fell by 10.1% year-on-year, continuing a downward trend caused by production restrictions and safety inspections in several key mining regions.