Author: Clyde Russell
LAUNCESTON, Australia (Reuters) – China has imported a record amount of coal in 2024, lifting global imports of the fuel to an all-time high. So why are coal exporters starting 2025 in deep blue?
For coal exporters, China is both their savior and tormentor, as record import volumes are only possible because sea prices have fallen to multi-year lows.
Export coal prices have fallen to remain competitive with China’s domestic prices, with the world’s largest coal producer and importer driving what happens in global coal markets.
China’s coal imports rose to a record 542.7 million metric tons in 2024, up 14.4% from 474.42 million tons in 2023, according to customs data released on Monday.
There were several factors that led to the increase, including lower hydropower generation, which boosted demand for thermal coal for power generation.
However, probably the main factor behind China’s record imports was the fall in sea coal prices from leading exporters Indonesia and Australia.
Indonesian coal with an energy content of 4,200 kilocalories per kg (kcal/kg) was valued by commodity price reporting agency Argus at $49.97 a tonne in the week to December 30, down 13.5% on the year and the lowest amount since April 2021.
Australian 5,500 kcal/kg coal, a type popular with Chinese buyers, was quoted by the Argus at $81.77 a tonne in the port of Newcastle in the week to December 27, down 12.3% on the year and the weakest since July 2021.
Prices got off to a soft start in 2025, with Australian crude falling to $81.01 a tonne in the week to January 10, while Indonesian fuel slipped to $49.67.
The drop in seaborne thermal coal prices came as domestic prices in China also weakened, with consultants SteelHome valuing coal at Qinhuangdao port at 775 yuan ($106) a tonne on Monday.
That was marginally higher than a recent low of 765 yuan a tonne on Dec. 27, which was the weakest since June 2023, and down 17.6% from the 2024 high of 940 yuan in late February.
There is a bit of a murky situation with coal prices and import volumes and it is not clear whether the high level of shipments is the result of weakening prices or whether lower prices have allowed volumes to remain strong.
For China, imports rose in the second half of the year as marine prices fell, with the strongest month being November at 54.98 million tonnes.
But India, the world’s second-largest coal importer, showed a different pattern, with imports falling in the second half of 2024, even as prices weakened.
India’s total coal imports stood at 228.72 million tonnes in 2024, down a modest 2.7% from a record 234.99 million tonnes in 2023, according to data compiled by commodity analysts Kpler.
UNCERTAIN 2025
The question for coal producers is whether offshore demand will be as strong in 2025 as it was in 2024, and the outlook is less certain.
Global seaborne imports of coal were 1.279 billion tonnes in 2024, up slightly from 1.276 billion the previous year, according to Kpler.
China could import less in 2025, and the China Coal Transportation and Distribution Association said at a seminar last week that it expects imports to drop to 525 million tons.
India may also see lower imports if domestic production continues to grow and the government continues its policy of encouraging more consumption of locally produced products.
Outside of the two big importers, it’s hard to be optimistic. Demand in other major buyers in Asia, Japan and South Korea, is likely to remain stable at best.
European imports fell for the second year in 2024 to 88.52 million tons from 108.98 million in 2023, according to Kpler data.
Despite the loss of Russian pipeline supplies, utilities are unlikely to switch back to coal given environmental concerns.
The views expressed here are those of the author, a columnist for Reuters.
