Russell: The imports of thermal coal from Asia continue to rise, except in India
Asia increased thermal coal imports for the third consecutive month in July as major buyers like China, Japan and South Korea purchased more fuel to meet the 'peak summer demand.
According to Kpler, commodity analysts, Asia is expected to import about 73.16 millions metric tons of seaborne thermal coal in July. This is up from 70.31 in June, and above the 71.04 in July last year.
This year, thermal coal is more in demand as a cheaper alternative than liquefied gas. Qatar, which supplies about 20% of world LNG, has been largely shut down by the Iran war, leading to an increase in spot prices.
China is the largest coal importer in the world. According to analysts DBX Commodities, thermal coal arrivals in July were 28.14 millions tons, which was the highest this year, up from 25,67 million in June, and 24.1 in July 2025.
In China, thermal coal is not a competitor to LNG for power generation. Imports are being driven up by a combination of a constrained domestic production and rising electricity generation.
China's coal output dropped by?9.7% from a previous year to 380.88 millions tons in June after safety inspections following the death of 82 miners in a mine disaster in Shanxi Province on May 22. This was the country's worst mining accident in 17 years.
According to official data, China's thermal energy generation, which is dominated by coal and a very small amount of gas, increased 0.5% in June, and 2.9% during the first half of the year.
Although China's domestic coal production is expected to increase in the coming months, it may still remain high. Thermal generation will continue to increase in 2026, as the deployment of renewables is not enough to meet the expected 5% growth in total electricity consumption this year.
JAPAN, SOUTH KOREAN
According to DBX's estimates, Japan, the third largest coal importer in the world, will see 10.46 million tons arrive in July. This is up from 7.51 millions in June, and the highest level since January.
South Korea is the fourth largest buyer and on track to import 8.54 million tonnes in July. This is up from 6.08 millions in June, which was the highest since last August.
According to globalCOAL, the price of 6,000 kilocalories per kilogram (kcal/kg), Australian thermal coal in Newcastle Port reached a four-week peak at $132.76 for a ton over the past seven days.
Japan and South Korea are the main buyers of this grade, while China prefers fuels with lower grades from Indonesia and other top exporters like Russia and Australia.
Singapore Exchange contracts on Indonesian coal that has an energy content of 4,200 kcal/kg, ended Monday at $61.97 per ton. This is down from the three-year high reached on June 26. However, it's still 38% higher than the low for this year so far of $45.00 in early January.
Prices are rising, which is why one of the largest importers doesn't buy more. India, the world's second largest importer of thermal coal, will see seaborne arrivals drop to 10,88 million tons this July from 12,3 million in June, and to the lowest level since August last year.
India would import more coal at lower prices if electricity demand was higher, despite the lack of strong monsoon rainfall.
The coal supply has been strained, as the coal stock at power plants dropped to only 14 days' worth by mid-July. Normally, they have between three and four weeks of inventory.
Recent easing of prices for Indonesian coal, which India's utilities prefer, could boost import demand in the coming weeks. However, it would take a sustained price drop to see imports increase significantly.
You like this column? Check out Open Interest, 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)
