On July 28, 2026, thermal coal prices in the Asia-Pacific region surged to a year-to-date high, with the benchmark Newcastle spot index closing at USD 152.3 per ton, up 12% from the same period last month. This was the largest single-month increase since the winter of 2025, indicating that the coal market has once again entered a tense state as the summer peak power demand arrives.
Heatwave sweeps Asia-Pacific, thermal power demand surges
Major economies including China, India, and Vietnam have been hit by persistent extreme heat since mid-July, with temperatures exceeding 40°C in many areas, leading to a sharp rise in air conditioning loads. Data from the State Grid of China showed that on July 27, the national maximum power load reached 1.32 billion kilowatts, up 8.6% year-on-year, with thermal power accounting for over 70% of output. India's Ministry of Power urgently required all coal-fired power plants to operate at full capacity, but coal inventories were only sufficient for 12 days, the lowest level in nearly two years.
In Southeast Asia, Vietnam saw thermal power generation increase by 25% year-on-year due to insufficient hydropower output, further raising its dependence on imported coal. Countries such as the Philippines and Thailand have also launched emergency coal procurement plans, accelerating regional price increases.
Supply chain setbacks: Indonesia and Australia export disruptions
Indonesia, the world's largest thermal coal exporter, was hit by continuous heavy rain and floods in July, shutting down multiple mines in the main coal-producing area of Kalimantan and disrupting rail and port transportation. Data from Indonesia's Ministry of Energy and Mineral Resources showed that coal production in the first three weeks of July fell 18% year-on-year, and exports decreased by 22%. Meanwhile, coal mines in Australia's New South Wales and Queensland also saw lower shipments due to labor disputes and maintenance activities. The simultaneous tightening by the two major suppliers made spot resources scarce in the Asia-Pacific market, with buyers competing to raise procurement prices.
In addition, coal exports from South Africa's Richards Bay port remained constrained due to railway congestion. Although direct exports to Asia-Pacific are relatively small, it indirectly pushed up global coal shipping prices, further passing through to landed costs.
Green transition period: Coal power's 'ballast' role highlighted
Although countries are accelerating the deployment of renewable energy, solar and wind power are significantly constrained by weather conditions and lack stability under extreme heat. Experts from the China Electricity Council pointed out that current energy storage system costs remain high and cannot fully replace the peak-shaving role of coal power, making coal's position as a baseload energy difficult to shake in the short term. Coal consumption in the Asia-Pacific region in the first half of 2026 increased by 4.3% year-on-year, and is expected to hit a record high for the full year.
The latest report from the International Energy Agency (IEA) also emphasized that the pace of coal power retirement in the Asia-Pacific region is slower than expected, especially in countries like Indonesia and Vietnam, where the scale of coal power projects under construction remains large, keeping coal demand rigid for the next three years.
Downstream cost pass-through, multiple countries face inflationary pressure
The rise in coal prices has begun to pass through to industrial electricity and manufacturing. In some Chinese provinces, large industrial electricity prices have increased by 20%, adding cost pressure on high-energy-consuming enterprises such as aluminum smelting and cement. India's National Power Corporation stated that power generation costs rose 15% year-on-year in July, which may push up electricity prices. Vietnam Electricity Group had to cut power supply quotas for industrial users to prioritize residential electricity.
Market analysts believe that with supply bottlenecks unresolved and hot weather continuing, Asia-Pacific coal prices may break through USD 160 per ton in August. In the fourth quarter, attention should be paid to the boosting effect of the La Niña phenomenon on hydropower and the risks of policy adjustments.
Outlook: High-level operation becomes normal, investment opportunities and risks coexist
In the short term, the Asia-Pacific coal market will maintain a tight supply-demand balance, with prices more likely to rise than fall. For investors, coal stocks and related futures offer trading opportunities, but caution is needed regarding long-term risks from carbon emission policies and accelerated new energy substitution. Laos Asia-Pacific Finance will continue to track real-time energy prices, providing you with the latest market dynamics and decision-making references.
