China’s thermal coal use edges higher as chemical demand offsets power weakness

China’s thermal coal consumption rose slightly in the first eight months of 2025, reaching 2.7 billion tonnes (+0.5% y-o-y). Industrial recovery—particularly in coal-to-chemicals—offset weaker power-sector demand.

The power sector’s coal burn slipped 0.7% y-o-y to 1.7 Bt as hydro and renewables displaced generation earlier in the year. In contrast, coal use for chemicals surged 19%, supported by strong margins and high plant utilisation.

Construction-related sectors remain the main drag. Overall, 2025 demand is tracking ~1% higher y-o-y, with Q4 consumption hinging on winter temperatures and hydro output.

Key takeaways:

• Chemical demand has become China’s key growth driver for coal.
• Power-sector burn remains subdued but could rise with colder weather.
• Inventories and domestic output keep import demand in check.

Source: Commodity Insights – “Chinese Thermal Coal Demand,” October 2025