China has set its benchmark price for power station coal for 2026 at 675 yuan per ton, matching the level agreed for 2025. The price was finalized after annual negotiations between coal producers and large power companies. This process is meant to reduce volatility and support a reliable fuel supply for power generation.
The benchmark price is a key reference point in China’s coal market. It underpins long-term supply contracts between mining firms and utilities, which cover around three quarters of the coal used by power plants. While spot prices are determined by daily market conditions, they tend to track the benchmark over time.
Coal prices were volatile over the past year. Prices dropped to roughly 610 yuan per ton at Qinhuangdao Port in mid-year as demand softened. Later, tighter safety checks reduced output, and higher temperatures pushed up electricity demand as air conditioning use increased. These factors drove prices above 800 yuan per ton before they fell back again as expectations for winter demand weakened.
Coal still plays a major role in China’s electricity system, providing about 56 percent of total power generation. This share is much lower than it was two decades ago, but coal remains important for keeping the grid stable when wind and solar output changes. Authorities have continued to support high production levels and imports to reduce the risk of power shortages.
Spot prices reached a 12-month high of 827 yuan per ton in November as utilities increased stockpiles ahead of winter. Analysts expect prices in 2026 to remain volatile within a wide range. The addition of more coal-fired plants, adjustments to pricing rules, and changes in weather patterns are likely to influence the market. Longer-term demand will continue to depend on policy decisions and energy security concerns.
