China's coal-fired power generation fell in the week of September 3-10, as cooling demand weakened and temperatures dropped across most of the country, the China Electricity Council (CEC) said in its latest weekly report.

Daily average power generation at monitored coal-fired plants stood at 8.4 TWh, down 5.1% from the previous week and down 13.4% from a year earlier, according to CEC fuel statistics.

Cold air pushed temperatures notably lower in northern China, with cooling extending nationwide. Residential cooling demand continued to weaken, dragging coal-fired generation and coal consumption lower on a weekly basis.

However, regional trends diverged, with southern China posting a sharp week-on-week increase on regional heatwaves and high power load, while eastern, northeastern, northwestern and northern China continued to decline.

Coal consumption averaged 4.37 million tonnes each day in the week, down 5.5% week on week and 9.6% year on year. Southern and central China posted weekly increases of 8.9% and 0.2%, respectively, while eastern, northeastern, northwestern and northern China fell 15.8%, 11.5%, 3.9% and 1.3%.

With daily consumption falling and coal deliveries to plants declining in tandem, utility inventories remained broadly stable. As of September 10, coal stockpiles at monitored power plants stood at 103.4 million tonnes, down 0.34% from September 3 and 12.22% from the same period a year ago. This could cover 20.5 days of use, 1.8 days below the year-earlier level but up 0.8 days from September 3. Inventories at seaborne-served plants continued to recover week on week, while stockpiles in central and northwestern China declined.

As of September 10, month-to-date power generation at monitored coal-fired plants fell 14.6% from a year earlier, while year-to-date output was down 1.5%. Month-to-date coal consumption at coal-fired plants fell 10.8% year on year, with year-to-date consumption down 0.4%.

Overall supply across major producing regions remained tight while prices retreated from highs during the week. At ports, prices posted an "inverted-V" trend as market sentiment shifted from bullish to bearish. In the import market, miners held firm on offers while traders showed some flexibility in quotations.

Safety inspections in major mining hubs remained strict, keeping supply constraints in place. But with ample production quotas for mid-September and previously suspended mines gradually resuming operations, coal output is likely to recover in the coming week. Supported by national policy, Xinjiang is maintaining stable output and strengthening transport capacity, which will provide important continuity support for national coal supply.

CECI import index sample data showed that national thermal coal arrivals in September are expected to rise slightly from August. Cargoes purchased in late August were mostly scheduled for delivery in mid-to-late September, but risks stemming from rising oil prices and FOB price increases warrant attention.

On the demand side, after the White Dew solar term, temperatures across most of the country are expected to drop to seasonal norms over the next ten days, with off-season effect gradually emerging. Seasonal temperature declines and steadily rising renewable output continued to push utility daily consumption lower, marking the end for the summer peak season.

Meanwhile, Autumn maintenance at thermal power units is set to begin in mid-to-late September. Aside from essential restocking needs, overall restocking appetite is low amid high coal prices, with power coal procurement focused on long-term contract volumes and strong resistance to high-priced spot coal.

In the non-power sector, demand from the chemical and building materials sectors remained stable, while expectations for the traditional "Golden September" peak season have softened, with demand release pacing moderating.

The CEC said the coal market is expected to show a pattern of "persistent supply constraints, weakening off-season demand and high prices under pressure", with both supply and demand weak and lacking a one-sided driver.

After prices surged sharply, buyers turned cautious and speculative demand fell significantly. Although supply constraints remain, overall restocking appetite for high-priced cargoes is low, with mine-mouth prices likely trending lower while portside prices remaining in a stalemate. Market participants should closely monitor the pace of mine resumption in major producing regions and Xinjiang coal outbound shipments.

The CEC recommended: first, fulfilling long-term coal contracts and strengthening production-transport coordination to consolidate the foundation for power coal supply security. Second, scientifically managing the pace of winter peak restocking and pre-holiday reserves, conducting restocking in batches given current utility inventories below year-earlier levels, avoiding concentrated high-price purchases and reasonably controlling procurement costs.

Third, closely tracking changes in international energy markets and the import coal situation, coordinating domestic and international channels, flexibly adjusting import procurement pacing and effectively leveraging imports as a supplementary adjustment tool.

Finally, focusing on the Three Gorges reservoir impoundment process and Yangtze River basin inflow conditions, tracking the marginal impact of hydropower output changes on thermal power demand and preparing contingency plans for power coal demand fluctuations in advance.