China has reduced its coal imports and increased exports on ample supply of the commodity, Bloomberg has reported, citing a 13% increase in outbound coal shipments from the country in the first five months of the year.
China exported 2.5 million tons of coal between January and May, with the bulk going to Japan, Indonesia, and South Korea. Coal production, meanwhile, reached 5 billion tons in the period, while imports were 8% down on the year.
Record-high domestic coal production and weaker coal-fired power generation in China have resulted in declining demand for thermal coal imports into the world’s biggest coal market, with the trend emerging earlier this year, after imports topped 500 million tons in 2024. The Chinese state central planner, meanwhile, has mandated a 10% increase in coal stockpiles for power generators.
In view of the low domestic coal prices, weaker demand, and high coal inventories at ports, China’s import decline has not been a surprise, and analysts indicated earlier this year they would not be surprised if the trend of lower coal imports continues for the next few months.
China’s coal association expects production to grow at a faster clip than consumption in 2025, suggesting that the oversupply could continue until the end of the year, despite peak demand season in the summer.
A lot has been said about China’s growing generation from wind and solar, which analysts note has been undermining demand for coal-fired generation. Yet last year, coal generation broke another record, reaching 6.34 trillion kilowatt-hours, data from China’s National Bureau of Statistics showed earlier this year, even as wind and solar installations kept surging and breaking their own records.
Still, growth in thermal power generation was the weakest in nearly a decade last year, excluding the pandemic years 2020-2022 when China was under lockdowns.
By Irina Slav for Oilprice.com
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