Portside thermal coal prices in China have edged up since mid-July, supported by low supply, rising power plant consumption, speculative buying and sellers' firm pricing, though gains are narrowing amid subdued end-user demand and persistently high inventories across the supply chain.

Data from Sxcoal showed coal stockpiles at four northern China ports (Qinhuangdao, Caofeidian, Jingtang and Huanghua) have climbed above 30 million tonnes, repeatedly hitting fresh year-to-date highs. As of July 21, inventories stood at 30.67 million tonnes, up 5.67% from early July and 13.2% from a year earlier.

Northern port inventories are likely to continue rising in the near term. While margins of port-bound coal remain thin and overall supply is low, output stays elevated under peak-summer supply security measures, ensuring steady inflows to ports. Meanwhile, unseasonably mild temperatures, particularly in the middle and lower Yangtze River regions, have kept power plant consumption moderate.

Sxcoal data showed vessels waiting at northern China ports averaged 82 per day in July, well below 124 in June and 104 a year earlier, reflecting weak end-user loading activity.

The inventory overhang extends beyond northern ports. Guangzhou port coal stocks reached 3.44 million tonnes as of July 20, up 6.47% from early July and 13.08% year on year, Sxcoal data showed.

With power plant stockpiles high, long-term contract deliveries stable and prompt import cargo arrivals still ample, Guangzhou port inventories are expected to keep rising in the near term. Nearby Fangcheng port stocks have also been slowly increasing, hitting their highest since early April 2025 as of July 17.

Downstream power plant inventories remain elevated. Coal stockpiles at six major coastal power groups totaled 14.56 million tonnes as of July 20, down 1.07% from early July but up 2.71% year on year, according to Sxcoal.

With ample stockpiles, end users show little appetite for spot purchases, leaving the market reliant on seller sentiment to sustain the uptrend. The lack of strong fundamental support has capped price gains, which are narrowing.

Going forward, even if hot weather boosts demand, the pace of inventory drawdown will be key. Unless stockpiles across the supply chain are meaningfully reduced, the peak-summer rally will remain constrained.