Asia’s seaborne thermal coal imports ticked higher in July 2025, climbing to 70.66 million metric tons, a 12% increase from June’s 63.02 million tons, according to data from Kpler. But this rise hides a deeper shift in regional demand: it’s not coal giants China or India behind the growth—it’s the developed economies of North Asia, notably Japan, South Korea, and Taiwan.
A Tale of Two Markets: North Asia vs. South Asia
Japan led the rebound, importing 10.0 million tons of thermal coal, up dramatically from 6.16 million tons in June. Although June marked Japan’s lowest import volume since January 2017, July’s figures indicate a swift seasonal recovery driven by rising electricity demand and strategic stockpiling.
South Korea, Asia’s fourth-largest coal buyer, also saw a sharp uptick. Imports surged to 7.49 million tons, up from 5.49 million tons in June, reaching the highest level since August 2024. Taiwan imported 3.91 million tons, slightly up from June’s 3.72 million tons—its best monthly figure since November 2024.
What’s fueling this return to coal? Analysts point to two key factors: seasonal electricity demand during the hot northern summer and cost advantages of thermal coal over liquefied natural gas (LNG). While the Newcastle Index price for high-grade coal has risen 22.4% from its April low to $112.06 per ton in early August, it remains more economical than spot LNG, priced at $12.10 per mmBtu—still above the economic threshold for coal-fired power in Japan ($11.20 per mmBtu).
China and India: The Pullback Continues
While North Asia ramped up, China and India retreated. China’s July imports rose to 22.78 million tons from 18.21 million in June, but that rebound comes off a three-year low and is still down from 26.99 million tons in July 2024. For the first seven months of 2025, China’s imports of seaborne thermal coal dropped 17.1% year-on-year, reflecting increased domestic production (up 5% in H1 2025) and expanded renewable capacity.
India followed a similar trajectory. Imports in July declined to 11.51 million tons from 13.93 million in June—the weakest monthly figure since November 2024. The drop correlates with a 3% decrease in coal-fired generation and a 24.4% surge in renewables during H1 2025, showcasing a pivot away from imported coal.
Price Divergence: High-Grade vs. Low-Energy Coal
The price narrative reveals diverging trends. While premium coal benchmarked against Newcastle rallied to $112.06 per ton, lower-energy coal preferred by China and India showed muted gains. For instance:
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5,500 kcal/kg coal was priced at $67.49 per ton, only slightly up from the recent four-year low of $66.00.
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4,200 kcal/kg Indonesian coal stood at $41.20, marginally above the low of $40.45 in early July.
This price weakness in low-quality grades mirrors the demand softness in China and India, leaving global coal exporters facing a fragmented and regionally driven market.
Outlook: Volatility Ahead
The July rebound in thermal coal imports may be short-term and seasonal, driven by temperature peaks and energy competition in North Asia. But structural trends—rising domestic production, greater renewable investment, and evolving cost curves—are likely to cap long-term demand from Asia’s largest consumers.
For market participants, this means one thing: volatility will persist. Traders, suppliers, and policymakers must monitor shifts in fuel cost parity, climate policy, and regional weather patterns, all of which now move markets faster than ever.