China’s coal demand and production are expected to continue rising in 2025, with coal remaining the dominant fuel in the country’s energy mix. According to the China Coal Transportation and Distribution Association, Chinese coal production is forecast to increase by approximately 1.5% compared to 2024, marking the ninth consecutive year of growth.
Coal demand is also projected to rise by around 1%, driven by the power sector and higher demand from the chemicals industry.
“Coal will remain the backbone of China’s energy system, particularly as domestic production rises and inventories remain plentiful,” the association noted in a briefing, as reported by Bloomberg.
With higher domestic production and sufficient coal reserves, coal prices are expected to remain relatively low. Chinese coal production is surpassing demand, which is expected to further reduce prices, according to industry officials.
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“An avalanche of inventory is flooding the market,” said an analyst from the China Coal Transportation and Distribution Association. “Power plants are offloading stockpiles due to oversupply,” the analyst added.
Despite the rapid expansion of renewable energy sources, thermal power generation in China, primarily from coal-fired power plants, rose by 1.9% from January to November 2024, compared to the same period last year. This increase indicates a continued reliance on coal, despite the growth of renewables in recent years.
Although coal’s share of China's electricity generation has decreased with the rise of renewables, it still accounts for about 60% of the country’s power generation, despite fluctuations such as increased hydropower output during periods of abundant rainfall.
Editing by Reiner Simanjuntak
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