ASIATODAY.ID, JAKARTA – Global coal prices have slipped to their lowest level in more than two months, exposing a widening divide in Asia’s energy market where China is aggressively ramping up imports while India is cutting purchases despite rising electricity demand.
Benchmark seaborne thermal coal closed at US$128.5 per ton, down 0.43% and extending its two-day decline to 2.3%. The price marks the weakest level since late April, highlighting persistent market uncertainty even as Asian coal imports climb sharply.
The contrasting strategies of the region’s two largest coal consumers have become the dominant force shaping the market.
According to commodity intelligence firm Kpler, Asia’s seaborne thermal coal imports are projected to reach 77.37 million metric tons in June 2026, the highest monthly volume in six months. The figure represents a significant increase from 68.39 million tons in May and is approximately 22% higher than the same period last year.
China Drives Import Boom
China remains the biggest contributor to the surge.
The world’s largest coal importer is expected to purchase 27.65 million tons of seaborne thermal coal in June—its highest monthly level in six months and nearly 48% higher than a year earlier.
Unlike Japan and South Korea, China’s buying spree is not primarily driven by geopolitical tensions in the Middle East. Instead, it reflects tightening domestic supply conditions.
Electricity generation from thermal power plants continued to rise, while domestic coal production weakened following stricter mine safety inspections triggered by a deadly mining accident that claimed 82 lives.
The tighter supply has pushed domestic coal prices to their highest level since October 2024, making imported coal from Indonesia and Australia increasingly competitive for Chinese power producers.
LNG Shock Revives Coal Demand
Coal demand across Asia also received support from soaring liquefied natural gas (LNG) prices following the conflict involving Iran.
After military tensions disrupted energy markets and threatened shipping through the Strait of Hormuz, spot LNG prices for North Asia jumped more than 140% before easing. Even after retreating, LNG remains substantially more expensive than before the conflict.
The widening price gap has encouraged utilities in Japan and South Korea to switch back toward coal-fired power generation.
Japan’s thermal coal imports are forecast to reach 7.82 million tons in June, up 33% from a year earlier, while South Korea’s imports are expected to climb 41% to 7.30 million tons, the highest level since January.
India Takes a Different Path
India, however, is moving in the opposite direction.
Seaborne thermal coal imports are projected at 12.32 million tons in June—virtually unchanged from May but well below last year’s level.
Higher international coal prices have encouraged Indian utilities to rely more heavily on existing stockpiles while accelerating the deployment of renewable energy.
Renewable electricity generation in India surged 29.3% year-on-year in May, accounting for a record 17.9% of the country’s total power generation, underscoring New Delhi’s efforts to reduce dependence on imported fossil fuels.
Market Faces Opposing Forces
The coal market now faces conflicting dynamics.
China’s growing appetite for imports and stronger buying from Japan and South Korea provide short-term support for demand. However, India’s retreat, combined with concerns over global economic growth and volatile energy markets, continues to weigh on prices.
The result is an unusual market environment where Asian coal imports are reaching multi-month highs while benchmark prices continue to weaken.
For exporters such as Indonesia and Australia, China’s sustained demand offers a critical lifeline. Yet unless broader regional consumption accelerates or supply tightens further, the global coal market may continue to struggle to regain upward momentum despite robust import volumes. (AT Network)
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