Coal Industry: Fundamentals Continue To Improve, Price Levels Are Rising

 Data recently released by the National Bureau of Statistics shows that in 2025, the national large-scale industrial raw coal production reached 4.83 billion tons, an increase of 1.2% year-on-year, setting a new record high. From the perspective of the main coal-producing areas, in 2025, Shanxi Province's total large-scale raw coal production was 1.305 billion tons, an increase of 2.1%. However, this year's Shanxi Provincial Government Work Report has already stated that the coal production in 2026 will stabilize at around 1.3 billion tons. This means that the output of this major coal-producing province will be subject to a certain degree of control.

 In recent years, Xinjiang's coal production has rapidly increased, becoming an important factor affecting the market. The Xinjiang Uyghur Autonomous Region Bureau of Statistics recently released data showing that the cumulative output of raw coal from large-scale industrial enterprises across the region in 2025 was 5.53 billion tons, a 1.9% increase year-on-year, which is a significant slowdown from the 17.5% growth rate in 2024.

 The coal industry report suggests that the domestic supply of thermal coal will remain at a high and ample level in 2026. However, considering the ongoing domestic overproduction inspections and "anti-collusion" efforts, limited new capacity, and the possibility of coal mines controlling output to balance inventory and ensure profits, there is a strong expectation that the growth rate of raw coal production will slow down.

 A research report on the coal industry by Changjiang Securities suggests that if Indonesia strictly adheres to its annual production quota of 600 million tons, it is estimated that Indonesia will have approximately 36 million to 37 million tons of coal available for export in 2026, a decrease of 80 million to 90 million tons compared to 2025. In 2025, China imported approximately 21 million tons of thermal coal from Indonesia, accounting for 47% of Indonesia's total exports. Based on this ratio, it may affect China's coal import volume by 37.6 million to 42.3 million tons. In 2026, Indonesia's coal production is likely to decline, which will have a supportive effect on coal prices in our country.