Coal-fired power plants in China saw demand strengthen in the week of August 20-27, with notable regional divergence and continued seasonal inventory drawdowns, according to the latest weekly report from the China Electricity Council (CEC).

Daily power generation at monitored coal-fired plants averaged 10.9 TWh during the period, up 5.4% from the previous week but down 3.8% year on year, CEC fuel statistics showed.

By region, central, northern and northwestern China posted sharp week-on-week gains in both generation and coal consumption, while northeastern China saw declines due to rainfall.

Coal burn at the monitored plants averaged 5.67 million tonnes, up 5.0% week on week but down 0.6% year on year. Specifically, central, northern, northwestern and southern China rose 22.4%, 10.2%, 5.6% and 0.9% respectively from a week earlier, while eastern and northeastern China fell 0.1% and 4.1%. Coal arrivals at the plants declined 1.4% week on week and 6.9% year on year.

Coal inventories at the plants stood at 104.17 million tonnes as of August 27, down 9.85% from a year earlier and 3.4% lower than on August 20. The stock could cover 19 days of use, down 1.5 days from the same period last year.

For seaborne-supplied plants, daily generation fell 1.0% week on week and 6.8% year on year. Coal consumption was 1.72 million tonnes, up 0.3% from a week earlier but down 1.3% year on year. Inventories at these plants totaled 28.91 million tonnes, down 1.36% from August 20, covering 16.8 days of use, down 0.2 day.

Cumulative power generation at these plants fell 5.9% in August as of August 27, while the year-to-date figure was down 0.8%. Coal consumption dropped 2.9% month to date but rose 0.1% year to date.

In the coming week, supply is expected to improve marginally as production quotas reset at the start of September, with output likely to rise across major producing regions. Rainfall has eased in western Inner Mongolia, allowing production to recover gradually, while heavy rain in parts of Shanxi warrants monitoring for potential output disruptions. Imported coal supply remains limited by slow approval of new Indonesian RKAB quotas and diminished price advantages over domestic coal.

Over the next ten days, coal consumption at both inland and coastal plants is expected to decline as temperatures fall seasonally and clean energy output recovers. Non-power coal demand is gradually picking up ahead of the traditional September-October production peak, though cost constraints are likely to keep the pace of demand release moderate.

CEC analysis indicates that the tight balance is likely to ease gradually as demand weakens further or supply recovers with mine resumptions. Coal burn at power plants will decline as the summer peak demand fades. However, supply-side constraints may remain prominent in the near term, and coal prices are expected to stay high with volatility.

CEC recommends strengthening long-term contract performance and coordinating production and transport in major producing regions to address weather-related supply disruptions. It also advises scientifically managing inventory replenishment during the off-season and winter storage preparation, with region-specific strategies and phased purchasing to avoid concentrated buying at high prices.

Additionally, CEC calls for optimizing outbound transport channels for Xinjiang coal to better supplement supply gaps from major producing regions, closely tracking imported coal market dynamics, and coordinating domestic and international supply channels to raise inventory security levels.