China’s thermal coal imports are expected to climb to approximately 25.63 million metric tons in August, marking the most significant monthly increase since December, This post delves into the forces propelling this surge, underlying market dynamics, and what it signals for global coal markets and energy policy.
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July’s coal output declined by roughly 3.8% year-on-year—lower than previous months due to weather challenges and capacity controls
Despite the dip in output, coal-fired power rose 4.3% in July, increasing demand for imported volumes
Key suppliers like Indonesia and Australia are offering competitively priced coal, helping drive import growth
Ongoing inspections and production quotas to curb oversupply have constrained domestic output, nudging buyers toward overseas sources
Earlier in the year, China’s coal imports fell—down 18% in May and 6% in March—largely due to ample coal supplies at home and growing renewable energy penetration
Domestic coal prices dropped by around 20% in early 2025, even prompting the NDRC to order power plants to build up domestic stockpiles by 10% to help bolster prices
Wind, solar, and hydropower have continued to erode the dominance of thermal coal in China’s energy mix
Interestingly, approvals for new coal-fired capacity rose to 11.29 GW in Q1 2025, exceeding the total for the first half of 2024—a nod to policy hesitancy around fully phasing out coal
As China’s imports climb, Indonesia and Australia are seeing stronger outbound volumes; August imports from Indonesia alone may reach 16.13 million tons, with Australia adding 5.84 million tons
Renewed import demand from China has nudged coal prices upward—Indonesia’s 4,200 kcal/kg coal rose from ~$40.45 to ~$43.33 per ton in August
While China is ramping up coal purchases, India’s imports are slipping—down to around 9.74 million tons in August, as renewable generation displaces coal-based electricity
The tug-of-war between constrained domestic production and unmet demand could introduce price volatility, particularly if imports remain low-cost.