Thermal coal imports into Asia have surged for the third consecutive month, backed by summer demand from Japan, South Korea, and other major players. Despite the region’s notable commitment to renewables, Asia currently consumes nearly 90% of global seaborne thermal coal.
China undoubtedly leads the pack thanks to its energy-intensive manufacturing hubs, with experts predicting the country’s thermal coal imports will reach 28.14 million tons this month, up from 24.1 million last July.
Commodity analyst Kpler predicts Asia’s seaborne thermal coal imports will hit 73.16 million metric tons in July, jumping nearly 3 million tons from last month. Coal mostly serves as a source of electricity for many Asian nations and has enjoyed significant demand this year as countries in the region moved away from liquefied natural gas, which is more expensive than coal.
However, China’s increased appetite for electricity-generating thermal coal isn’t due to an avoidance of costly natural gas. China is importing more coal to account for shortfalls in local coal production, which fell by nearly 10% year-over-year in June. The fall in output occurred after a tragic mine accident that cost the lives of 82 people in Shanxi province.
The May coal mine accident is China’s deadliest mining accident in 17 years and led to sweeping safety inspections. Coal currently powers the vast majority of thermal electricity generation in China, and the country is expected to maintain high coal import and domestic production levels through the year.
Japan, which is only surpassed by China and India in coal imports, will likely import up to 10.46 million tons of thermal coal this month, increasing by close to 3 million tons from June and breaking the record for monthly imports in 2026, DBX says.
South Korea ranks right after Japan in thermal coal imports and is expected to import 8.54 million tons of coal, nearly 2.5 million more than the previous month.
Asian demand for coal imports caused Australian thermal coal prices to reach a one-month high of $132.76 a ton for a week straight. South Korea and Japan mainly buy thermal coal from Australia while China prefers Indonesia for its lower-grade fuel, supplementing its supplies with imports from top exporters Australia and Russia.
India is expected to lower thermal coal imports to 10.88 million tons this month from 12.3 million in June due to unfavorable prices. The country has been facing rising electricity demand in the absence of expected rains which is stressing local coal supplies. A recent fall in Indonesian coal prices could lead to higher Indian thermal coal imports, but only if the fall is sustained.
Entities like Frontieras North America Inc. with extensive involvement in the global coal industry will be closely watching buying trends in Asia to get glimpses into what the near-term trajectory of the market is likely to be.
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