Thermal coal prices have surged past $100 per tonne for the first time since 2012, with Newcastle spot cargo prices up almost 100% this year alone. The big question is how long will the rally last? The reality is that a retreat is inevitable. Rising prices are encouraging Chinese miners to once again boost output, with Chinese authorities keen to stabilise prices. The price rally was originally triggered by a Chinese government decision to cap coal mining output and rein in rampant overcapacity, which forced utilities to import more coal. Prices could keep rising into early 2017, as the northern hemisphere winter boosts demand and miners take time to bring on more production, before prices ease. China and other big importers like South Korea are reportedly short of supplies ahead of winter, which many forecasters expect to be colder than the last two. A gradual price retreat is mirrored in the forward curve, where Chinese coal futures show a price fall from $85.30 per tonne for November to $71 by April 2016 and to $61.15 a tonne in October 2017.