China's raw coal production saw a notable decline in June, whereas coal imports surged significantly. Meanwhile, electricity generation increased slightly, with the growth rate of thermal power continuing to slow down, and minor fluctuations in non-electricity industries.

However, due to the impact of a fatal coal mine accident, coal prices, especially coking coal prices, rose significantly in early June. As the impact of the accident gradually subsided, the upward trend in thermal coal prices halted first in mid-June, and by the end of the month, coking coal prices also gradually stabilized.

Raw coal production plummets

China's National Bureau of Statistics data showed June raw coal output posted the steepest decline since November 2016, falling to 380.88 million tonnes, down 9.7% year on year and down 4.11% from May. The monthly output was the lowest since May 2024.

Even so, daily average output stood at 12.70 million tonnes, still above the 12-million-tonne threshold.

Strict safety inspections and a policy emphasis on stable rather than excessive output drove the decline, though early preparations for peak summer demand and elevated power consumption helped sustain high production levels.

January-June cumulative output totaled 2.37 billion tonnes, down 1.7% year on year, with the decline widening 1.4 percentage points from the first five months.

Imports surge

Coal imports hit 42.78 million tonnes in June, surging 28.60% from May and 29.49% year on year, reversing a 7.7% decline in May. The jump exceeded expectations, driven by concentrated arrivals of cargoes purchased from late April through May as utilities front-loaded procurement ahead of the summer peak.

High clearance volumes of Mongolian coal and tight domestic supply also supported import growth.

First-half imports totaled 225.40 million tonnes, up 1.7% year on year, marking the second-highest half-yearly volume on record after the first half of 2024.

Thermal generation growth narrows further

Thermal power generation rose 0.5% year on year in June to 498.0 TWh, slowing 1.6 percentage points from May, as widespread rainfall in southern China limited the impact of heatwaves. Industrial power demand was also subdued.

Total power generation reached 827.6 TWh in June, up 2.0% year on year, with daily average output at 27.59 TWh. January-June generation totaled 4,750.1 TWh, up 3.5%.

National electricity consumption rose 3.7% year on year in June to 898.1 TWh, with secondary sector consumption up 4.7% and industrial consumption up 4.9%. Residential power use fell 3.1%.

Hydropower output rose 4.8% year on year to 145.7 TWh, slowing 8.2 percentage points from May, as reduced inflows at major dams offset heavy rainfall in the middle and lower Yangtze reaches.

Nuclear power generation rose 8.5% to 42.7 TWh, wind output fell 5.6% to 73.3 TWh, and solar output rose 14.2% to 67.9 TWh.

January-June thermal power output totaled 3,028.2 TWh, up 2.9% year on year. Hydropower rose 9.3% to 588.6 TWh, nuclear fell 0.7% to 234.6 TWh, wind fell 1.9% to 559.1 TWh, and solar rose 12.3% to 339.4 TWh.

Non-power sector demand stable

Coke output in June was 42.04 million tonnes, up 1.1% year on year but down 1.6% from May. Pig iron output fell 0.9% year on year to 71.99 million tonnes, crude steel output rose 0.4% to 83.67 million tonnes, and steel product output was flat at 126.56 million tonnes.

Steel mills maintained high production rates despite weak steel prices, supporting stable coke demand.

January-June coke output totaled 252.50 million tonnes, up 1.6% year on year. Pig iron output fell 2.8% to 426.64 million tonnes, crude steel fell 3.0% to 499.95 million tonnes, and steel products fell 0.9% to 718.78 million tonnes.

Conclusion

Coal prices rose sharply in early June, particularly for coking coal, following a fatal mine accident in Shanxi in late May. But thermal coal price gains stalled by mid-June as the impact faded. Coking coal prices also stabilized toward month-end as supply recovered and downstream buyers turned cautious.

Entering July, thermal coal prices remain range-bound amid high inventories across the supply chain and lackluster demand, with the market awaiting the impact of summer heat. Coking coal faces pressure from supply disruptions and cautious buying.