Chinese coal prices are likely to keep falling until the start of the peak summer season, suppressing imports of the fossil fuel and taking a toll on the country’s miners.

The country’s benchmark thermal coal price is down by around a quarter since early October as record output coincided with lackluster industrial demand and a relatively mild winter. The declines have steepened since late February, with prices dropping 11% to 825 yuan ($114) a ton over the last five weeks.

Power plants starting months-long seasonal maintenance are likely to add to the bearish sentiment, China Electricity Council said in a statement this week. That, as well as swollen inventories, will suppress trading activity, said the industry group that represents electricity generators.

The price downturn may run through the end of May, Thermal Coal Group, a local industrial news outlet, said on in its WeChat account on Tuesday. Demand from power plants typically picks up over the summer months due to higher use of air conditioners.

Beijing has prioritised coal production in recent years to avoid a repeat of a power crunch in 2021, with Russia’s invasion of Ukraine the following year reinforcing the strategy. The policy has been successful in ensuring energy security, but has come at the expense of progress on decarbonisation and led to a spate of fatal accidents at mines.

China’s domestic coal production rose 9% in 2022 and then by another 2.9% last year. Around 600 million tons a year of mining capacity has been added since 2021, according to the China National Coal Association.

President Xi Jinping has promised that the country’s coal use will start declining in the next five-year plan period starting in 2026. However, the drop in consumption is unlikely to be swift and demand will likely plateau, given the fossil fuel’s continuing role in meeting energy security.

The tepid demand and price slump will curb buying from overseas, industry consultant Mysteel said in a note this week. China has also reimposed a tax on coal imports this year to protect its own miners after inward shipments hit a record in 2023. Coal imports will drop by 2.2% this year, Fenwei Digital Information Technology Co., a market intelligence firm, said last month.

The price slump is impacting China’s coal sector, with industrywide profits down 37% in the first two months from a year earlier, National Bureau of Statistics data show. China Shenhua Energy Co., the country’s biggest coal producer, plans to almost halve spending on its coal unit this year and has cut its output target.