China sets tighter rules for 2026 domestic thermal coal term contracts

China has issued detailed rules governing the signing and supervision of medium- and long-term thermal coal supply contracts for 2026, tightening volume requirements, pricing mechanisms and fulfillment oversight to ensure a stable fuel supply for power generation, according to a notice from the National Development and Reform Commission Nov. 19.

The guidelines reaffirm China's policy to maintain smooth coal flows between producers, transporters and power utilities.

Stricter volume mandates for miners, power plants

NDRC asked power plants to calculate their 2026 contract demand based solely on domestic coal consumption from November 2024 to October 2025, with contracted volumes required to cover no less than 80% of estimated demand. Contracts that meet or exceed the 80% threshold will be placed under strict regulatory oversight.

Coal enterprises, meanwhile, must contract at least 75% of their resource volume, with major miners expected to maintain stable supply volumes compared with the previous year.

NDRC has tightened the fulfillment standards in 2026. The new document states that the monthly fulfilment rates of term contracts must not fall below 80%, while quarterly and annual fulfilment should be 90% or higher, with even stricter compliance required during peak summer and winter periods.

The NDRC requires that production-area contracts adhere to regional reasonable price bands and adopt monthly pricing adjustments.

Data becomes complianceobligation

According to the new guidelines, data submission has become a compliance obligation where both suppliers and consumers must report fulfillment data by the 10th day of each month, and discrepancies default to the lower reported number.

Railway operators transporting coal have also been asked to prioritise allocating rail transport facilities for fulfilling contracts. Provinces must submit contract information by Nov. 20, 2025, with disclosure on the National Coal Trading Center platform by Nov. 23. Contract signing, uploading and verification processes are to be completed by mid-December. The document further outlines that the transport contracts must be uploaded no later than March 10, 2026.

Meanwhile, according to multiple sources who attended Coaltrans in Bali, Indonesia in 2025, Chinese buyers are opting for shorter-duration contracts, some as brief as a quarter, rather than traditional annual deals, Platts, part of S&P Global Energy, reported Oct. 6.

"Traders looking for imported coal have softened their procurement stance owing to enough supply and rising coal prices," said a Singapore-based trader, adding that there is less activity this week.

Chinese heating demand is expected to rise amid La Nina conditions. China's National Meteorological Center has issued a blue alert as a cold wave swept across China, causing strong winds and a sharp temperature drop since Nov. 17, local media reported.

NDRC had also recently announced plans to maintain coal storage at power plants at a high level of over 220 million metric tons, with an expected number of usual days to be around 35 days, in order to ensure balanced energy supply-demand dynamics for the 2025-26 winter heating season.