In 2024, China's coal market experienced steady operations characterized by increased production, higher imports, and slower demand growth.
CHINADAILY
In 2024, China's coal market experienced steady operations characterized by increased production, higher imports, and slower demand growth. Improved supply-demand dynamics contributed to an overall stable and orderly market environment. Total coal production reached approximately 4.76 billion tons, a slight increase from the previous year. Growth was uneven, with a slower pace early in the year followed by stronger gains later. Coal imports, meanwhile, surged to a record high of 550 million tons, up 12% year-on-year. Domestically, coal prices fluctuated within a narrow range, trending downward over time. Regionally, Shanxi, Shaanxi, Inner Mongolia, and Xinjiang together accounted for 82% of the country's total output.
High coal inventories were observed throughout the supply chain. Stockpiles in major production regions remained stable, while downstream sectors, including power plants and Bohai Rim ports, maintained elevated inventory levels. The continued availability of imported coal reinforced price stability, limiting large fluctuations. In the first half of the year, coal production remained high, but stricter safety inspections and regulatory measures in key regions like Shanxi caused localized declines. This resulted in a slight drop in overall production compared to the high base of the previous year. These factors provided a floor for prices, keeping thermal coal prices above last year's lows.
In the second half, an accelerating economic recovery boosted electricity demand, driving coal consumption higher. Coal production in major regions rebounded, and transportation activities intensified, stabilizing the market and minimizing price volatility. However, as winter approached, power plants slowed their inventory reductions, and non-power industrial demand weakened. This led to a continued decline in coal prices toward year-end.
On the consumption side, coal demand was supported by stable industrial production and expanding fixed-asset investments, which kept power generation coal resilient. However, weak performance in the real estate sector and a slowdown in infrastructure growth tempered demand from downstream industries such as steel and construction materials. Overall, the coal market achieved a relative balance in 2024, with strong demand for power generation coal offsetting weaker non-power sector performance.
Looking ahead to 2025, China is expected to implement a range of macroeconomic policies to support economic recovery and growth, driving coal consumption higher. The market is likely to remain balanced but could experience more significant fluctuations. Demand from major coal-consuming industries is expected to grow steadily, with power generation coal accounting for an increasing share of total consumption. A reduction in long-term supply contracts and a rise in spot-market coal trading could amplify price volatility.
Non-power coal consumption is expected to show mixed trends. While the chemical industry is likely to remain stable, sectors such as construction materials may continue to shrink. Nonetheless, broader economic recovery and expansion are expected to sustain moderate growth in overall coal demand. If long-term contract prices ease further, average coal prices may see additional downward pressure. In 2025, China's coal market is poised to maintain stability while adapting to evolving economic and industrial dynamics, ensuring sustained growth and balance in key sectors.