Sxcoal Issue 53# | China thermal, coking coal market review and 5-yr outlook
Chinese thermal and coking coal market review (2020-24) and five-year outlook.
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Thermal Coal
China's thermal coal market is currently experiencing a shift from a tight supply-demand balance to a looser one, driven by increased domestic production and imports, along with a reduced share of coal in the national energy mix, despite overall energy demand growth. Since 2022, ensuring coal supply has been a key policy objective, with authorities reinforcing the role of coal-fired power in national energy security.
From 2020 to 2024, China’s raw coal output increased from 3.9 billion tonnes to 4.78 billion tonnes (CAGR: 5.2%), although growth slowed in 2024. Thermal coal supply followed a similar trend, rising from 3.22 billion to 3.89 billion tonnes during the same period (CAGR: 1.8%).
Demand for thermal coal grew from 3.46 billion tonnes in 2020 to 4.20 billion tonnes in 2024 (CAGR: 4.9%), with fluctuations during the pandemic period (2020-2023) before slowing in 2024. The power sector remained the largest consumer, with thermal coal consumption increasing from 2.10 billion tonnes in 2020 to 2.66 billion tonnes in 2024 (CAGR: 6.1%).
Coal imports have fluctuated based on domestic supply gaps, price competitiveness, and policy changes. Even after the end of China's zero-tariffs policy in 2024, import volumes exceeded 400 million tonnes, supported by cost advantages and trade with key exporters. As domestic high-quality capacity increases and demand growth slows, imports are expected to decline.
Looking ahead to the 2025-2029 period, coal will remain China's primary energy safeguard, with production policy prioritizing stability and reliability. Non-fossil energy will gain a larger share in the energy mix, and coal consumption as a percentage of total energy will continue to decline. A significant decrease in thermal coal imports is projected for 2025 due to increased domestic production and narrowing price gaps.
Our latest market study China Thermal Coal Market Review 2020-24 and Outlook for 2025-29 offers a data-rich, clearly structured analysis of China's thermal coal sector, incorporating: 1) historical production, consumption, and import trends; 2) sector-specific demand breakdowns; 3)policy analysis and forward-looking regulatory trajectories; 4) price dynamics and market expectations; and 5) supply chain scenarios and risk factors.
Coking Coal
The coking coal market in China experienced volatility from 2020 to 2024, characterized by initial price drops due to the pandemic, followed by surges to record highs due to trade disruptions. Prices retreated from these highs between 2022 and 2024 as domestic production increased and Mongolian coal clearance improved.
China's coking coal output peaked at 493.5 million tonnes in 2022. However, output decreased to 473 million tonnes in 2023 and 2024, resulting in a modest CAGR of 0.56% from 2020-2024. Imports grew from 73 million tonnes in 2020 to 122 million tonnes in 2024, with a CAGR of 13.9%. Coking coal demand showed an upward trend, largely following coke production, but fell to 588 million tonnes in 2024, with a CAGR of 1.27% over five years.
In 2025, the market is expected to face another downturn because of falling demand and rebounding domestic supply, coupled with firm import volumes, potentially leading to a substantial price drop. From 2026-2029, a more balanced market may emerge due to anticipated supply declines as some coal producers face potential losses.
Technological upgrades, rising extraction costs, and inflationary pressures are expected to increase overall cost levels, potentially stabilizing or modestly rebounding coking coal prices. Sxcoal forecasts a further decline in China's coking coal demand in 2025 due to recovering domestic production and high import levels.
Sxcoal's latest edition of the China Coking Coal Market Review 2020-24 and Outlook for 2025-29 forecast the market dynamics in next five years from policy environment, domestic production capacity trends, import dependence and trade dynamics, steel industry policies and market-driven price behavior.