China’s Coal Demand Gets Boost as Heatwave Lifts Aircon Use

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(Bloomberg) — China’s thermal coal prices are rebounding as a mild start to summer finally gives way to hotter weather, boosting air-conditioner usage and power demand.

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Spot prices in Qinhuangdao reached 822 yuan ($821) a ton on Monday, paring a 7% decline earlier in the month that saw them fall to a low of 797 yuan a ton on July 13, according China Coal Resource. Prices could rise further as intense heat grips much of the nation, according to the China Coal Transportation and Distribution Association. 

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

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Central and eastern China are experiencing widespread hot and humid conditions as two high-pressure systems merge to form a heat dome, according to the China Meteorological Administration. Many areas — from the remote northwest region of Xinjiang to the heavily populated eastern seaboard — could see highs of 37C (99F) in coming days, it added.

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Northeastern China will also see unusually high temperatures into the weekend, with the most anomalous warmth concentrated in the cities of Beijing and Shenyang, according to Paul Markert, a meteorologist at commercial forecaster Vaisala.

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Coal prices had slipped earlier this summer as utilities built up stockpiles in anticipation that El Niño would bring heat and drive up air-conditioning demand. Instead, much of the country was doused with heavy and persistent rainstorms that cooled temperatures and helped boost hydropower generation — offsetting some coal demand.

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Hydro generation is likely to weaken in coming months after rising 9.3% over the first half of the year from 2025 levels, according to the coal association. The group also expects weak wind and solar generation during the summer. 

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While China’s coal stockpiles are still high, domestic production remains constrained after a deadly accident in Shanxi in late May led to widespread safety inspections that choked output in one of the country’s top mining regions. Production in the province fell 32% in June.

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On the Wire

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Zijin Gold International Co. terminated a planned C$5.5 billion ($3.9 billion) takeover of Canada’s Allied Gold Corp. after the acquisition failed to get approval from Chinese regulators, settling instead for a minority stake.

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When it comes to gauging the possibility of a sales rebound for his luxury group in China, Hermès Executive Chairman Axel Dumas turns to an unusual metric: pork prices.

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The trading arm of Chinese copper giant CMOC Group Ltd. is making a push into iron ore with a deal to finance a mining company in Brazil.

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China signaled it plans to take a more important role in steering the global campaign to tackle climate change, as officials offered further details on strategy to mitigate and adapt to rising temperatures. 

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Indonesian smelters operated by China’s Tsingshan Holding Group Co., the world’s largest nickel producer, have suspended exports of some metal products as executives seek clarity on a new government inspection policy

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This Week’s Diary

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(All times Beijing)

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Thursday, July 30

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Friday, July 31

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Saturday, Aug. 1

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