China Coal Prices Rebound as Heat Dome Drives Power Demand

Thermal coal prices in northern China reversed course Monday, with spot prices at the Qinhuangdao hub rising to 822 yuan ($821) a ton, according to China Coal Resource. The move pared a 7% decline from earlier in the month that had pushed prices to a low of 797 yuan a ton on July 13.

Two high-pressure systems have merged into a heat dome across central and eastern China, the China Meteorological Administration said. Many areas from the remote Xinjiang region to the heavily populated eastern seaboard could see highs of 37C (99F) in coming days. Northeastern China, including Beijing and Shenyang, will also see unusually high temperatures into the weekend, said Paul Markert, a meteorologist at commercial forecaster Vaisala.

"Thermal coal prices are more likely to rise than fall, as the peak season for coal-fired power consumption is far from over," Li Xuegang, a senior analyst at the China Coal Transportation and Distribution Association, said on a Wednesday webcast. The impacts of El Niño have yet to fully materialize, he said, and the cumulative effects of tightening supply and growing demand will continue to build.