Cheap Chinese Coal is Making it Difficult to Reduce Consumption

Group 1 - Chinese coal prices are expected to remain low as the country approaches 2025, with current prices around 700 yuan ($98) per ton having subsided after a brief spike in August [1][2] - The Chinese government aims to reduce coal usage starting in 2026 as part of its climate targets, but declining prices complicate these efforts [2][3] - China Shenhua Energy Co. anticipates less price volatility in the second half of the year, contrasting with previous coal shortages that led to price spikes [3][4] Group 2 - The Chinese authorities have managed supply effectively, leading to a more stable outlook regarding demand surges [4][5] - Despite a significant drop in coal imports this year, there was a 20% increase in August compared to the previous month, indicating a strategy to mitigate supply disruptions [5] - The growth of solar and wind energy is meeting electricity demand, allowing for reductions in coal usage, although capacity remains unchanged as a backup [6][7] Group 3 - The continued availability of cheap coal is making it difficult to reduce its consumption, with its increasing role in the chemicals industry contributing to this trend [7] - Shenhua's parent company predicts a prolonged plateau in coal demand, potentially reaching peak coal as early as next year [7]