Thermal coal prices at Qinhuangdao port, the major coal trading port in Hebei province, dropped to 740 yuan ($117) a metric ton on Monday, a record low in the past 20 months, because of the rising hydropower generation and the shrinking downstream demand.

Meanwhile, the coal stockpiles at Qinhuangdao port reached 9.33 million tons, the most since November 2008. Anything more than 8 million tons is considered overstock at the port.

Li Xuegang, a coal expert at Qinhuangdao Coal Trading Center, said the increasing coal imports and falling demand are the chief reasons for the high inventory.

The port added 580,000 tons to the coal supply this week, which is one of the reasons behind the falling coal prices.

The downstream users, six major power generators in China, have a total supply of 15.45 million tons, a more than 20-day supply — a 10-day supply is standard.

The largest coal ports group, including the ports of Qinhuangdao, Huanghua and Tangshan, has a coal inventory of 16 million tons. The stockpiles have been increasing since the beginning of the month.