The continued contraction in coal supply has ushered in a new cycle of economic growth for the coal industry. Since the National Energy Administration launched its inspection of coal mine overproduction in July, coal supply has contracted significantly: in August, the national output of raw coal from large-scale industrial enterprises was 390 million tons, a year-on-year decrease of 3.2%; although output increased to 410 million tons in September, it remained in negative growth territory for the third consecutive month. Regarding imported coal, from January to October 2025, my country imported a total of 380 million tons, a year-on-year decrease of 11%.
Affected by the "anti-involution" policy, national coal production from July to September decreased by 10 million tons per month compared to the average of the past 18 months. It is estimated that monthly output in the fourth quarter will remain between 390 million and 400 million tons, and annual output may decrease by 50 million tons year-on-year to 4.75 billion tons.
Entering November, cold air activity gradually increased, and winter heating in northern China has begun, leading to a continued rise in thermal coal prices. The port thermal coal price index rose by over 6% quarter-on-quarter in the third quarter, with the increase widening after November, breaking through the 800 yuan/ton mark and repeatedly setting new highs for the year.
The port coal prices for reference on November 7, 2025 are as follows: 5500 kcal: 813 yuan/ton (+9); 5000 kcal: 718 yuan/ton (+9); 4500 kcal: 624 yuan/ton (+8). The expectation of a cold winter fueled coal prices. The La Niña phenomenon has fueled market expectations for coal demand this winter. With the start of the heating season in northern China, phased replenishment of thermal coal winter stocks has begun, leading to a rapid rise in coal prices at Bohai Rim ports. In November, a single-day price increase reached as high as 10 yuan/ton.
Currently, the northern port thermal coal price index (5500 kcal) has broken through the 800 yuan/ton mark, surpassing the previous high of 772 yuan/ton set on January 8th of this year, and market bullish sentiment remains strong. Imported coal prices have also recently followed the trend of domestic coal prices, with the price of high-calorie thermal coal futures at the Port of Newcastle in Australia surging from $104/ton on October 31 to the current $110.45/ton.
"Coal prices have little room for downward adjustment. With the release of peak season demand, prices may rise to 900 yuan/ton by the end of the year," a research report from Minsheng Securities believes. The report notes that the Ministry of Emergency Management will begin safety production assessments and inspections in November, and recent safety and environmental inspections at coal production sites have become stricter. Coupled with the gradual implementation of production reductions following the previous production inspection report in Inner Mongolia, coal supply is expected to further contract. With temperatures dropping, northern China will fully enter the heating season in mid-November, and industrial production will also enter its year-end peak. Electricity demand will steadily increase, and with the arrival of the winter peak for electricity and coal consumption, daily power plant consumption will gradually recover. At that time, coupled with further contraction on the supply side, the rise in coal prices is expected to accelerate.
