According to data from commodity analysts Kpler, China’s seaborne thermal coal imports are expected to reach 25.63 million metric tons in August, compared with 22.77 million in July, marking the strongest level since December 2023. Imports from Indonesia, the top supplier, are projected at 16.13 million tons, a five-month high. Imports from Australia, the second-largest supplier, are forecast to climb for the third consecutive month to 5.84 million tons.
This rise comes despite official figures showing a 1.3% decline in thermal power generation between January and July, due to increased hydropower and renewable output. However, thermal generation in July rose 4.3% year on year, while domestic coal production fell 3.8% from July 2023 to 380.99 million tons, the lowest since April 2024. The combination of stronger generation and reduced output has supported higher imports.
Low global prices also encouraged demand. Indonesian coal with 4,200 kcal/kg dropped to a four-year low of $40.45 a ton in early July, before recovering to $43.33 a ton by late August. Similarly, Australian coal with 5,500 kcal/kg reached $71.92 a ton in the week to August 22, up from a low of $65.72 in June.
In contrast, India’s thermal coal imports have weakened. Kpler estimates August arrivals at 9.74 million tons, down from 11.99 million in July and nearly half of May’s 17.96 million, the year’s peak. Coal’s share in India’s electricity mix fell to a five-year low in July, 4.2% lower than the same month last year. Meanwhile, hydropower output grew 22.4% and renewables rose 14.4%, exceeding the 1.8% increase in total power generation.
India is also ramping up domestic coal supply. More private miners are entering the market, and analysts expect production in the fiscal year starting April 1 to reach about 1.15 billion tons, compared with a record 1.05 billion tons in the previous year.
The key implications of these contrasting trends are clear. In the short term, fluctuations in domestic coal production remain central to demand and pricing in the seaborne market, with China still the dominant influence. In the longer term, both China and India are advancing renewable energy deployment and boosting domestic coal output, suggesting their reliance on imported thermal coal may gradually decline, despite occasional periods of stronger demand when local supplies weaken or coal-fired generation increases.
