
China and India lead modest revival in Asia thermal coal imports
Thermal coal imports in Asia show signs of recovery. Lower prices attract major buyers like China and India. China's Australian coal imports rise recently. India's imports increase from Indonesia and Russia. Russian coal becomes competitive. Overall, declining prices may increase demand. Sustained low prices are crucial for continued importer interest. The market watches closely for further developments.
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There are some tentative early signs that weak thermal coal prices are starting to boost import demand among Asia's heavyweight buyers China and India.Asia's seaborne imports of the fuel used mainly to generate electricity rose to a five-month high of 74.12 million metric tons in May, according to data compiled by commodity analysts Kpler.This was up from 68.56 million tons in April, although it was still below the 78.30 million tons from May 2024.For the first five months of the year Asia's imports of seaborne thermal coal were 346.96 million tons, down 7.0% from the same period in 2024.The decline was largely been driven by weaker demand from China and India, the world's two biggest importers of coal.China's seaborne imports of thermal coal were 116.62 million tons in the January-May period, down 13.6% from the same period in 2024, while India's were 71.07 million, a decline of 4.7%.China's appetite for seaborne coal has waned so far in 2025 after reaching a record in 2024, as strong domestic output and higher hydropower and renewable energy curbed coal-fired generation.The latest available data showed China produced 389.31 million tons in April, up 3.8% from the year-earlier month, while output for the first four months of the year was 1.58 billion tons, up 6.6%.India's domestic coal production has also been trending higher, with official data showing output of 86.24 million tons in May, up from 83.96 million in the same month last year.Asia's seaborne coal prices have been sliding in response to the higher domestic output in China and India, with grades from both top exporters Indonesia and Australia hitting four-year lows.Indonesian coal with an energy content of 4,200 kilocalories per kilogram (kcal/kg), as assessed by commodity price reporting agency Argus, dropped to $46.20 a ton in the week to May 30, down from $47.46 the prior week and the lowest since April 2021.The grade, which is favoured by both Chinese and Indian buyers, has been trending lower since October 2023, and is now down 25% over that time period.Australian coal with an energy content of 5,500 kcal/kg dropped to $66.84 a ton in the week to May 30, the lowest since late May 2021 and a drop of 37% from October 2023, when it started its current downtrend.This grade is largely favoured by Chinese buyers, as utilities in Japan and South Korea prefer higher quality coal.CHINA GAINSCertainly China's imports of Australian thermal coal have ticked up in recent months, with Kpler data showing arrivals of 6.39 million tons in May and 7.01 million in April, up from the 4.17 million In March and February's 3.63 million.It's possible that China's import demand is responding to the lower seaborne prices, and there is also the seasonal pattern of higher imports as the summer peak for electricity consumption comes closer.India's imports of thermal coal rose to 17.84 million tons in May, up from 15.31 million in April and the strongest month since October 2023.The gain in May arrivals was largely due to increased imports from Indonesia, which supplied 10.24 million tons, the most since May last year.It's also worth noting that India's imports of Russian thermal coal reached a two-year high of 1.39 million tons in May, according to Kpler, rising from 1.14 million in April.They had not been above the 1 million tons per month level since June 2023, and the recent increase has largely been shipped from Russia's Pacific ports, rather than from those in Europe.This suggests that Russian coal in the Pacific is once again becoming price-competitive against Australian grades, and McCloskey World Coal's assessment of 6,700 kcal/kg fuel at Vostochny port does support this view.Russian coal was assessed at $73.26 a ton in the fortnight to June 2, up from the 54-month low of $68.13 the prior two-week period.Once adjusted for energy content differences and freight, it's likely that Russian and Australian cargoes are very closely matched for Indian buyers.The overall picture for seaborne thermal coal in Asia is that the declining prices may finally be leading to some uptick in demand, but it's also likely that low prices will have to persist to keep importers interested.(The views expressed here are those of the author, a columnist for Reuters.)

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