On July 10, the 2025 Summer National Coal Trading Conference, co-hosted by the China National Coal Association and the China Coal Transportation and Sales Association and organized by the Ordos Municipal People's Government, opened in Ordos. At the opening ceremony, Zhang Hong, a member of the Party Leadership Group of the China National Coal Association, delivered a keynote report titled Grasping the Trendy, Structural, and Uncertain Characteristics of the Coal Market, Strengthening Confidence, and Striving to Stabilize Supply, Market, Prices, and Expectations, focusing on the current supply and demand situation and new developments in the coal market. The main content of the report is as follows:

I. In the First Half of This Year, the National Coal Market Showed a Clear Oversupply Trend, Market Prices Fell, Industry Efficiency Declined, and the Difficulties Facing Enterprises in Old Mining Areas Were Prominent

The supply and demand situation in the national coal market in the first half of this year exhibited the following prominent characteristics:

First, the coal market was oversupplied. During the 13th Five-Year Plan period, through vigorous promotion of structural reforms on the coal supply side, the overall landscape of the coal industry underwent fundamental changes. Driven by market demand, national coal production achieved rapid growth for several consecutive years, increasing from 3.41 billion tons in 2016 to 4.78 billion tons in 2024, a net increase of 1.37 billion tons, or 40.18%. Over the nine-year period, coal production grew at an average annual rate of 4.31%. The average daily raw coal output nationwide rose from 9.5 million tons to over 13 million tons. During the same period, coal consumption showed a low growth trend, with an average annual growth rate of only 1.79% over the nine years. As coal production growth outpaced consumption growth for many years, the coal consumption growth rate turned downward in 2024, leading to a total decline in the first five months of this year, clearly indicating an oversupply in the coal market.

Second, the increase in national coal production rapidly concentrated in Shanxi, Shaanxi, Inner Mongolia, and Xinjiang. In the first five months of this year, national raw coal output reached approximately 1.99 billion tons, an increase of 110 million tons, or 6%, year-on-year, hitting a record high. Among this, coal production in Shanxi, Shaanxi, Inner Mongolia, and Xinjiang increased by 13.6%, 3.1%, 0.9%, and 9.8%, respectively, with total output reaching 1.616 billion tons, accounting for 82.03% of national output. The increase in output from these four regions was 98.77 million tons, accounting for 89.8% of the national increase.

Third, coal imports remained high, and the issue of a high proportion of low-calorific value lignite persisted. Since 2023, national coal imports have rapidly increased from around 300 million tons to 474 million tons, jumping to 540 million tons in 2024. Among this, coking coal imports reached 122 million tons, significantly impacting the coking coal market. Analysis indicates that the large volume of coking coal imports led to a surplus of approximately 50 million tons in the domestic coking coal market. This surplus prompted some coking blending coal to shift into the thermal coal market, exacerbating structural imbalances in the coal market. In the first five months of this year, total coal imports were 189 million tons, down 7.9% year-on-year. Among these, lignite imports accounted for 73.15 million tons (39%), thermal coal 55.29 million tons (29%), and coking coal 43.62 million tons (23%). The proportion of imported low-calorific value lignite remained high.

Fourth, coal inventories across society remained high. Since the second half of 2024, coal inventories have been at elevated levels. At the end of June, inventories at key coal enterprises stood at 92 million tons, up 50.9% year-on-year, with some mines experiencing top-clogging and production halts. Key power plants held about 200 million tons of coal, up 5.0% year-on-year. Inventories at Bohai-Rim ports were 30.22 million tons, up 18% year-on-year. Since late June, daily consumption has increased, and inventories have declined. Specifically, coal inventories at monitored enterprises fell 3.7% month-on-month; thermal power plant inventories rose 2.1% month-on-month; and inventories at Bohai-Rim ports fell 6.6% month-on-month.

Fifth, coal market prices fell sharply, and industry profits dropped significantly. Since the beginning of this year, spot coal prices continued the downward trend from 2024. By mid-to-late March, spot prices fell below contract prices. In June, contract prices fell below the central price level (675 yuan/ton). In July, the contract price for 5,500 kcal thermal coal at Bohai-Rim ports was 666 yuan/ton, down 34 yuan/ton year-on-year. On July 8, the spot price index for 5,500 kcal thermal coal at Bohai-Rim ports was 623 yuan/ton, down 257 yuan/ton year-on-year.

In terms of total industry profits, since the 14th Five-Year Plan period, market prices have fluctuated significantly with changes in coal supply and demand, leading to fluctuations in industry profitability. Total profits in the coal industry fell from 1.0202 trillion yuan in 2022 to 762.9 billion yuan in 2023 and 604.6 billion yuan in 2024. In the first five months of this year, total profits dropped to 126.4 billion yuan, down 50.6% year-on-year, with 53.6% of industry enterprises reporting losses. Some coal enterprises in old eastern mining areas are experiencing severe losses, requiring close attention.

Sixth, production in major coal-consuming industries continued to decline, significantly slowing the growth in coal demand. In the first five months of this year, production in major coal-consuming industries fell year-on-year, dampening coal demand growth. National thermal power generation decreased by 3.1% year-on-year; crude steel production fell by 1.7%; and cement and flat glass production fell by 4% and 4.9%, respectively. At the same time, new energy power generation increased substantially. National wind and solar power generation increased by 121.4 billion kWh, while thermal power generation decreased by 72.5 billion kWh during the same period. Since July, with the arrival of the peak summer energy consumption season, thermal power generation has rebounded, daily consumption at power plants has increased, inventories have declined, and coal market demand has shown a clear upward trend, with market prices recovering slightly.

II. The Trendy, Structural, and Uncertain Characteristics of China's Coal Supply and Demand Are Becoming Increasingly Prominent, Requiring Sustained Efforts to Address Structural and Phased Imbalances in the Market

From the perspective of the development trends in China's coal supply and demand, the goal of achieving carbon peak and carbon neutrality by 2030 is being pursued. The carbon peak and neutrality strategy is a major strategic decision made by the Central Committee after careful consideration, concerning the sustainable development of the Chinese nation and the building of a community with a shared future for mankind. Therefore, implementing this dual-carbon strategy represents a major trend in China's economic and social development, energy structure adjustment, and ecological environment protection.

Driven by this overarching trend, in the power sector, with the rapid increase in clean energy generation from hydro, wind, and solar sources, incremental substitution is becoming increasingly evident, and coal-fired power generation has entered a phase of low growth and fluctuating development. According to relevant data analysis, the average annual increase in national thermal power generation was 150 billion kWh during the 10th Five-Year Plan period and 250 billion kWh during the 11th Five-Year Plan period. During the 12th and 13th Five-Year Plan periods, the average annual increase was around 200 billion kWh. Since the 14th Five-Year Plan period, it has shown significant fluctuations. In 2021, the increase in thermal power generation was 475.6 billion kWh, falling to 82.9 billion kWh in 2022, then rising again to 378.9 billion kWh in 2023. In 2024, the increase dropped to 106.6 billion kWh, with coal-fired power generation increasing by just over 60 billion kWh. In the first five months of this year, thermal power generation decreased by 72.5 billion kWh year-on-year.

In the metallurgical sector, driven by declining demand, increased short-process steelmaking, the development of new technologies like hydrogen-based metallurgy, and contraction in traditional infrastructure, national crude steel production has entered a plateau phase since 2020. In the building materials sector, national cement production peaked at 2.48 billion tons in 2014 and has since been on a downward trend.

Looking back over the past decade, coal's share of primary energy consumption fell from 65.8% in 2014 to 53.2% in 2024, a decrease of 12.6 percentage points. The share of clean energy consumption rose from 16.9% to 28.6%, an increase of 11.7 percentage points. National coal consumption growth has shifted from rapid to low-speed growth and has entered a phase of fluctuation and gradual peaking. Comprehensive forecasts from domestic authoritative institutions suggest that total coal consumption in China will enter a plateau phase around 2028. This research indicates that China's coal consumption is about to enter a period of zero growth, gradually moving into a phase of reduced consumption. This development trend also signifies that the traditional coal industry model of relying on expansion, scale increase, and production growth for development is coming to an end. Driven by the need to cultivate new productive forces, there is an urgent need to innovate and establish systems and development models focused on structural adjustment, transformation, efficiency improvement, and quality enhancement.

In terms of coal consumption structure, the four traditional coal-consuming sectors are undergoing changes. The power sector (coal-fired power and heating) continues to drive coal demand; coal consumption in the steel and building materials sectors has entered a period of decline; some coking blending coal and high-grade thermal coal are shifting to the thermal coal market; and coal consumption in the coal chemical industry is experiencing moderate growth. Data analysis shows that coal-fired power generation increased from 3.95 trillion kWh in 2014 to 5.75 trillion kWh in 2024, a 45.6% increase, while coal consumption in the power sector (for coal-fired power and heating) grew by 42.5%. National crude steel production increased from 820 million tons to 1.07 billion tons in 2020, falling to 1.01 billion tons in 2024, with coal consumption in the metallurgical sector growing by 9.5%. In the building materials sector, cement production fell from 2.47 billion tons to 1.83 billion tons, a 25.9% decrease, with coal consumption in the sector falling by 19.3%. Coal used as feedstock in the national coal chemical industry increased by 87.1% over the decade.

In terms of coal production structure, the national resource development pattern has been optimized, with a significant reduction in the number of coal mines and a substantial increase in individual mine scale. The proportion of output from large, modern coal mines and surface mines has increased, overall coal productivity has improved, and the national capacity to ensure coal supply has strengthened. Over the past decade, the number of coal mines nationwide decreased from around 15,000 in 2014 to about 4,300 by the end of 2024. Eighty-three ultra-large mines with annual capacities of 10 million tons were built, with a total capacity of 1.36 billion tons per year. Surface mine output accounts for about 25% of national output, while large modern mines account for about 85% of national output. The production flexibility of coal mines has increased significantly. On this basis, raw coal output in the western region increased from 2.11 billion tons to 3.06 billion tons; output in the central region increased from 1.34 billion tons to 1.48 billion tons; and output in the eastern region decreased from 370 million tons to 240 million tons.

A tiered development and utilization pattern for coal resources in the east, central, and western regions has largely taken shape. At the same time, with the advancement of China's equipment manufacturing capabilities, the capacity for coal machinery equipment manufacturing and R&D has greatly improved. Significant progress has been made in the development of intelligent coal mining equipment, key components, and industrial software. The core competitiveness of coal-based equipment manufacturing has steadily strengthened, with notable improvements in high-end, intelligent, and green levels. According to relevant data analysis, since the coal supply guarantee efforts began in 2021, the total capacity increase through mine capacity verification has exceeded 600 million tons, accounting for about 70% of new coal capacity nationwide. The elastic production capacity of coal mines has significantly increased, enhancing emergency supply capabilities. This demonstrates that by increasing capacity through verification of large, modern coal mines and releasing elastic capacity during tight supply periods, production capacity can be quickly increased, market supply can be augmented, and market supply-demand pressures can be effectively alleviated. Conversely, appropriately contracting elastic capacity and controlling production during oversupply periods are effective measures to maintain stable coal market operations.

In terms of coal transport infrastructure, after decades of effort, a “seven vertical and five horizontal” coal railway trunk network and related supporting systems have been established, largely alleviating bottlenecks in coal railway transport. A coal shipping system centered on seven northern ports and receiving ports in the south has been built, with throughput capacity meeting the needs of coal transshipment. Thirty-three ultra-high voltage transmission lines, primarily for coal-fired and new energy power, have been constructed. The development of direct rail delivery, rail-water intermodal transport, sea-river combined transport, reserve bases, and modern logistics hubs is progressing steadily. A three-dimensional coal transport pattern has largely taken shape, significantly improving the capacity for coal resource allocation.

From the perspective of energy structure optimization and substitution for coal. Since 2020, wind and solar power generation in China have entered a phase of rapid development, with the cumulative generation of wind and solar power growing at an average annual rate of 46.09%. In 2023, wind and solar power generation exceeded hydropower generation for the first time; in 2024, wind and solar power generation surpassed hydropower generation by 28.8%. In the first five months of this year, wind power generation exceeded hydropower generation for the first time. In 2024, the combined generation from hydropower, wind power, and solar power increased by 1,327.3 billion kWh compared to 2021, equivalent to replacing about 600 million tons of thermal coal. In the first five months of this year, combined hydropower, wind, and solar power generation increased by 121.6 billion kWh year-on-year, equivalent to replacing over 50 million tons of thermal coal.

However, it must also be recognized that with the rapid increase in wind and solar power generation, the task of peak regulation for coal-fired power has become more challenging. Looking at the composition of national power capacity and generation in the first five months of this year, thermal power, with 40% of capacity, contributed 65.6% of generation; hydropower, with 12% of capacity, contributed 10.7%; and wind and solar power, with 45% of capacity, contributed 18.3%. Coal-fired power remains the backbone and stabilizer of China's energy supply, still accounting for 55% of national power generation, 70% of peak load capacity, and nearly 80% of grid peak regulation capacity.

Analyzing the factors of uncertainty in energy supply: In recent years, the Russia-Ukraine conflict has reshaped the global energy supply landscape, with the United States shifting from an energy importer to an exporter. Escalating tensions in the Middle East have contributed to instability in the global energy market. Tariff and trade wars initiated by the United States have further increased the uncertainty and complexity of global energy supply. It must also be recognized that in recent years, extreme weather events have become more frequent, with more occurrences of high summer temperatures and severe winter cold, highlighting the crucial role of coal as a stabilizer and guarantor of China's energy security and stable supply