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“Thermal coal bears, among which we were one of the biggest, have been reminded this year that it is not wise to fight the Chinese government,” Colin Hamilton, head of commodity research at Macquarie, told the Financial Times. “As long as China remains a meaningful thermal coal importer, it will act as a price setter.”

Related: Coal ETFs Heating Up on Growing Chinese Demand

Observers also pointed out that the increase in Chinese demand for coal coincided with rising temperatures as demand for electricity rose across the nation. Morgan Stanley projects coal-fired power production to increase almost 5% month-over-month in June and will rise further through July and August.

“The combination of rising demand growth and impaired supply has prompted an inventory drawdown,” Morgan Stanley analyst Tom Price told FT.

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VanEck Vectors Coal ETF