The prices of key seaborne thermal coal grades rebounded in September from four-year lows in June and July as China ramped up coal imports amid higher summer demand and falling domestic production.
After months of declining coal imports earlier this year, with July arrivals down by 23% from a year earlier, China’s coal imports strengthened in August and are set to remain at high levels in September, too.
China is on track to import 27.41 million metric tons of seaborne thermal coal this month, per data by commodity analysts Kpler cited by Reuters columnist Clyde Russell.
The September imports would come on the heels of 28.68 million tons of thermal coal imports in August, which hit the highest since December 2024, due to rising electricity demand in the summer and falling hydropower output.
Domestic production also played a part in China’s increased coal imports as Chinese coal output fell by 3% in August as a result of government measures to curb oversupply.
The rebound in Chinese thermal coal imports in August and September has pushed key regional seaborne prices higher this month. Indonesian coal prices rose by 5.3% since the four-year low hit in early July, while Australian benchmark coal prices increased by 5.9% from the four-year low in June this year, per estimates by Reuters’ Russell.
Lower demand amid the property crisis and weaker industrial growth combined with rising domestic production to weigh on coal imports in China in the first half of the year.
Amid oversupply, China was cutting imports and growing coal exports for most months until July.
But now imports have rebounded, and the market waits to see if the rebound will be just a blip during the summer power generation or a sustained recovery as Chinese authorities clamp down on excess capacity and oversupply in key industries.
By Tsvetana Paraskova for Oilprice.com
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