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Thermal coal's price has declined to a four-year low as rising production in China swamps the global market with supply.

Thermal %Coal is currently trading at $19.75 U.S. per metric ton, down 16% since the start of 2025 and at its lowest level since 2021.

Benchmark prices for thermal coal, which is used in power stations to generate electricity, have fallen form a peak in 2022 after Russia's invasion of Ukraine sparked an energy crisis and drove prices to record levels.

Coal's price reached an all time high of $457.80 U.S. a metric ton in September 2022.

High prices in 2022 and 2023 drove a surge in production, with China, India, and Indonesia opening new coal mines.

Domestic output in China, the world's biggest producer of thermal coal, has been at record levels since last year, which has led to a global oversupply, say analysts.

High inventory levels in China and India, the world's second-largest coal producer, have led to a steep price decline for thermal coal, say analysts.

Despite the current supply glut, global demand for thermal coal has risen in recent years due to growing use among power stations and artificial intelligence (A.I.) data centres.

Electricity providers such as %GEVernova (NYSE: $GEV ), %VistraCorp (NYSE: $VST ) and %XcelEnergy (NASDAQ: $XEL ) have seen their stocks rise amid growing demand from A.I. data centres and other sources.

Analysts expect coal prices to decrease further this year as the amount of supply remains elevated.

Most of the world's thermal coal is mined domestically and used in the same country where it is produced — only about one-tenth is shipped to foreign markets.