It’s Terribly Hot in China, But Coal Prices Still Have Room to Fall

(Bloomberg) — Despite scorching heat boosting power demand as fans and air conditioners get switched on, Chinese coal hasn’t been this cheap in over two years — and it could get even cheaper.

The fuel used by power plants dropped this week to 772 yuan ($108) a ton at the port of Qinhuangdou, its lowest since April 2021. The latest figures on supply show domestic production running nearly 5% ahead of last year, while imports have risen a whopping 90%. Indicators, from elevated inventories to a contraction in manufacturing activity, all point to souring demand as China’s economic recovery stalls.