China Coal Production Growth Hits Decade Low at 0.7% for 2026, Imports to Shrink Further
China's coal production growth is forecast to slow to its weakest pace in a decade during 2026, rising just 0.7% year-on-year to reach 4.86 billion tonnes, according to a February 11, 2026 report from the China Coal Transport and Distribution Association (CCTD). This represents an increase of only 35 million tonnes compared to 2025 levels.
Imports Face Significant Decline
CCTD projects China's coal imports will decline by 5.1% in 2026, falling to 465 million tonnes. This reduction is primarily attributed to policy changes in Indonesia – China's largest coal supplier – including:
- Proposed reductions in mining quotas
- Imposition of new export duties
- Suspension of spot coal deliveries
The association noted that should imports experience more substantial declines, China could offset potential shortfalls through domestic production adjustments and existing inventories.
Power Sector Transformation Accelerates
The slowdown aligns with structural shifts in China's energy landscape. Despite a 5% increase in overall energy consumption in 2025, coal-fired power generation declined for the first time in ten years. Renewable energy expansion continues to reduce the grid's reliance on thermal power.
Analysts at Wood Mackenzie highlighted a significant drop in coal power plant utilization rates, which fell from 60% in 2011 to 48.2% in 2025. This trend is projected to continue, potentially reaching 32% by 2035 as coal plants increasingly transition from baseload generation to providing reserve capacity.
Market Implications
These combined trends could reshape global commodity markets:
- Altered coal trade flows across Asia
- Potential pressure on seaborne coal pricing
- Heightened importance of China's strategic coal reserves
- Increased volatility in energy commodity markets
CCTD's analysis suggests China's coal sector stands at an inflection point, where domestic energy transition policies and international supply dynamics create significant market uncertainties.
Source: Reuters