China import surge increases seaborne thermal coal price: Russell
The price recovery is due to a rebound in China's seaborne thermal coal imports, but this boost will only last a short time as the recent surge in coal-fired power generation has slowed.
According to commodity analysts Kpler, China is the world's largest coal producer and consumer. It is expected to import 27,41 million metric tonnes of seaborne thermal coke in September.
The strength of August's arrivals, which reached 28.68 millions tons, was the highest since December.
The daily imports for September are 914,000 tonnes, just a little less than the 925,000 tons imported in August. However, the final September number may be revised upwards, as Kpler estimates that more cargoes will be unloaded by the end of September.
China's utilities have turned to imports after domestic coal production faltered due to increased mine safety inspections. Production fell 3% in August compared with the same month of 2024.
China produced 390.5 millions tons of steel in August, a slight increase from the 380.99 million tonnes recorded for July.
As the hottest summer in history boosted air conditioning demand, China's fossil-fuel electricity production increased at the same time as coal output.
According to data released by the government on September 15, thermal power generation in August was 627.4 kilowatt-hours (kWh), a 2% increase from the previous year.
The coal-fired electricity was also boosted due to the fall in hydropower output, which dropped by 10% from August of last year as some parts of the country were experiencing drought conditions.
In recent weeks, the price of seaborne thermal coal has recovered due to increased demand from utilities.
The price of Indonesian coal, with an energy content equal to 4,200 kilocalories (kcal/kg), according to the commodity reporting agency Argus rose by 5.3% to $42.62 a tonne in the past week. This is up from the low of $40.45 that was reached in the previous week of July 4.
The price of Australian coal with a 5,500-kcal/kg energy content ended at $69.60 per ton during the seven days leading up to September 12. This is a 5.9% increase from the four-year low reached in the week ending June 6, which was $65.72.
Import boost to FADE
If China's appetite for coal imports continues to grow, this will be a question that concerns the seaborne market.
It will be important to continue to limit domestic production through safety inspections targeting mines believed to have exceeded their approved plans.
Even if China slows down its domestic production, the rapid deployment of renewables like wind and solar in China will continue to reduce coal's share.
The current shoulder period between summer and winter peak demand for electricity will be a particularly challenging time.
China added 212 gigawatts of solar capacity to its grid in the first half 2025. This is more than twice the pace of 2024. While the pace will slow down in the second half, the total in 2025 should be higher than 300 GW. It is expected that this figure will surpass the 277 GW record set in 2024.
According to the State Grid Energy Research Institute (SGRI), China will add a record 140GW of wind power capacity by 2025. This is an increase of 77% over 2024.
Kpler reports that India is the second largest coal importer in the world and is expected to receive 15.08 million tonnes of thermal coal this September. This is up from the 11.04 million tons in August, and is the highest since May.
India's thermal imports will likely fall once the peak period of demand during the monsoons is over.
You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
These are the views of the columnist, an author for.
(source: Reuters)