BEIJING - China's domestic coal prices have bottomed out and will exceed 2023 highs this year, a major coal industry group said on Wednesday.

"Overall stockpiles are not very high, so if market purchases increase, that will directly cause prices to rise," said Han Lei, General Manager at the research department of China Coal Transportation and Distribution Association (CCTD).

China's thermal coal prices are currently at over 800 yuan ($110.41) per metric ton, which Han said was being viewed by the industry as the price floor for this year.

"We are seeing some bottoming out and rebounding," he said.

CCTD expects China's coal output to remain largely flat this year, compared with a 2.9% growth last year. Lei said on Wednesday he expected the lower output in the near-term to help to support prices.

Han also said recent government economic stimulus measures could boost demand for coal, adding that there was hope that the economy was bottoming out.

Demand for the polluting fuel has been hit by a slowdown in the cement industry, whose capacity utilisation has fallen to 50% from 80% around the same time last year, he said. A protracted real estate slowdown has been cited as one of the major reasons for relatively tepid coal demand.

Coal demand from the power sector has been stable, while consumption by the chemical sector has recovered slightly, growing to 6 million tons per week in April, compared with 5.5-million tons last year, according to a CCTD presentation.

Red Sea disruptions have made inflated freight costs, making imports more expensive. Freight costs for imports from Indonesia has risen by $1, with Australian shipments becoming more expensive by upto $3, Han said.

Coal imports by China, the world's largest user of the polluting fuel, are expected to be little changed or decline in 2024 despite an expected increase in overall demand for the polluting fuel.