China's coal-fired power generation hit a new seasonal high during the week of July 24-30, while coal inventories at power plants eased slightly from elevated levels, according to the latest weekly report from the China Electricity Council (CEC).

Daily average power generation at surveyed coal-fired power plants reached 10.40 TWh during the week, up 1.7% from a week earlier but down 5.9% year on year, data from the CEC showed.

In the first half of the week, widespread rainfall from residual typhoon circulation curbed solar power output, while resurgent high temperatures in the latter half pushed coal-fired generation higher on a week-on-week basis.

By region, daily average generation at power plants in North China and Northeast China rose 12.5% and 6.6% week on week respectively, driven by persistent heat, while Northwest, Central China, East China and China Southern Power Grid service areas fell 5.4%, 2.6%, 2.1% and 0.2% respectively.

Coal inventory at surveyed power plants stood at 112.89 million tonnes, down 360,000 tonnes from July 23, with an average of 21.7 days of consumption cover, as transport returned to normal after typhoon-related disruptions eased.

For seaborne-supplied power plants, daily average generation fell 1.5% week on week but rose 5.9% year on year. Daily coal consumption stood at 1.71 million tonnes, down 0.6% from a week earlier but up 9.4% year on year. Their coal inventories dropped to 29.76 million tonnes, down 380,000 tonnes from July 23, covering 18.2 days of use.

Cumulative generation at surveyed coal-fired plants in July fell 5.6% year on year, while year-to-date generation was flat on the year. Coal consumption in July declined 2.6% year on year, with year-to-date consumption up 0.6%.

In the mine-mouth market, coal supply remained constrained amid sustained safety inspections, particularly in Shanxi where a broad range of mines halted production for maintenance or after meeting production targets, while demand stayed subdued and prices held steady.

At ports, prices remained stuck at elevated levels with thin actual trading. Bohai Rim port inventories eased from earlier highs but stayed at relatively high levels for the season. Sellers held firm offers supported by inverted delivery costs and peak-season expectations, showing little willingness to sell at lower prices.

On the demand side, daily coal consumption at power plants rose modestly, but high existing inventories kept procurement largely need-based, with non-power sectors providing steady support. Most mines balanced output with sales and kept prices stable, while a few made minor adjustments based on truck queues and inventory levels. Traders remained cautious amid port price standoffs and inverted costs, keeping the overall market in a stalemate.

The CEC said the coal market is likely to see limited supply growth and continued coexistence of bullish and bearish factors, with some mines inclined to hold prices given low supply and high-temperature forecasts.

Over the next ten days, China will see a mix of heavy rainfall and high temperatures, with inland power plant consumption expected to rise notably while rainfall in many areas caps consumption growth. Coal-power demand is expected to remain broadly stable with regional divergence.

Supply growth in early August will be constrained by sustained safety inspections and intermittent rainfall affecting production and transport efficiency, though production quotas will be ample at the start of the month. Imported coal trading is likely to stay cautious amid market uncertainty, with steady supplementary purchases.

The CEC recommended anchoring long-term contract coal fulfillment and inventory safety, ensuring stable and reliable supply during the peak summer period, while closely monitoring production at mines and extreme weather impacts on transport efficiency, with contingency plans to guard against price volatility and temporary supply tightness.