Core Insights - China's thermal coal prices have surged to a five-month high due to the dual impact of heavy rainfall on supply and increased demand from high temperatures [1][3] Supply and Demand Dynamics - The benchmark spot coal price in Qinhuangdao reached 678 yuan per ton, marking the highest level since March 17, and reflecting an 11% rebound from the four-year low seen in June [1][4] - Heavy rainfall in mining areas has disrupted normal coal mining operations, while inspections targeting excess capacity have further suppressed production [4] - Rising temperatures have led to a significant increase in air conditioning usage among residential and commercial users, driving up electricity consumption and consequently boosting demand for thermal coal [4] - Morgan Stanley analysts, including Hannah Yang, noted that coal consumption across 25 provinces reached its highest level in at least five years on August 6 [4] - Despite the current price surge, there is a cautious outlook for future trends, with expectations that coal prices may start to decline by late August [4]