Thermal coal, the first energy market to go into a tailspin in 2011, has turned around with prices rallying for much of this year on an unexpected jump in imports from top consumer China that some analysts say will underpin sentiments further.

Coal prices crashed 70 percent over 2011 and 2015, to the lowest since the early 2000s, as analysts like the International Energy Agency and Goldman Sachs said China’s imports had peaked on measures to combat pollution and a move away from power-intensive industries.

But contrary to expectations, global coal prices have soared 30-60 percent this year as producers trimmed supply on demand worries. Both Australian physical coal prices and European futures are back above $60 per tonne and at their highest levels since the first half of 2015.

“Coal prices have surged in recent weeks as China forges ahead with capacity closures. On its own, this should support prices at current levels,” ANZ bank said on Friday.

The price surge has taken many by surprise.

“Nothing suggested to me that we were about to experience such a price push,” said a senior broker, echoing views stated by many traders, analysts and brokers.

Two factors have driven coal prices up.

Supplies from exporters like Indonesia and Colombia have dropped, as low prices pushed some miners out of business and others cut production, anticipating slowing demand.

At the same time, China’s imports have been rising since March, and were up almost 5 percent in the first half of the year versus the same period of 2015.

China’s new policy “for a reduction in the number of days domestic producers are allowed to operate (276 days annually versus 330 days previously), which will reportedly cut utilization rates to 84 percent, has indirectly contributed to greater imports,” ANZ bank said.

“If China continues to adhere to its new coal policy, its reliance on imports will continue to increase. This should result in slightly better prices in the second half of 2016 and early 2017,” the bank added.

But some analysts say the coal rally will be short-lived and that, like the oil market which has fallen 20 percent since June after a strong rally in the first half of the year, prices will start coming off soon.

“The macroeconomic conditions have deteriorated,” said Georgi Slavov of commodity brokerage Marex Spectron in a note to clients this week, adding that he was “bearish on thermal coal”.

Source: Reuters (Reporting by Henning Gloystein; Editing by Himani Sarkar)