- Buyers source domestic coal due to competitive pricing
- Indonesia’s exports to China drop over 20% y-o-y, m-o-m
Mysteel Global: China’s imports of thermal coal tumbled by 18.1% y-o-y to 27.17 million tonnes (mnt) in April, according to the General Administration of Customs (GACC). The figure represented the third straight month of y-o-y declines, suggesting the country has reined in imports of the fuel in a bid to ease the domestic oversupply issue.
April’s imports fell by 3.8% from 28.24 mnt in March, the GACC data also showed. Imports of thermal coal include “other coal”, “other bituminous coal”, and “lignite”, categorised in the international customs code.
From January to April, China’s thermal coal inflows totalled 110.22 mnt, lower by 7.6% compared with the same period in 2024, with the pace of decline accelerating from the 3.5% y-o-y fall recorded during January-March.
The downturn underscores Beijing’s increasing emphasis on balancing the domestic market, where thermal coal prices have remained under pressure for months due to tepid demand and ample supply. Mysteel Global noted that April saw domestic prices continuing to correct, discouraging seaborne purchases and diminishing import appeal.
Indonesia retained its position as China’s top thermal coal supplier last month, shipping 14.09 mnt in April, but the volume marked a 20.5% fall y-o-y and a 20.9% drop from March. Chinese traders cited limited price flexibility from Indonesian miners, who were reluctant to lower their offers amid mounting cost concerns. As domestic prices declined, many Chinese buyers shifted their buying focus back to local coal.
Australia remained the second-largest thermal coal supplier last month, shipping 6.59 mnt, up 1.9% y-o-y and 55.5% m-o-m. As Australian miners adjusted their prices in line with the Chinese domestic coal market, their products showed good competitiveness, prompting Chinese buyers to strengthen their procurement.
Meanwhile, shipments to China from Russia, the third-largest source, stood at 3.15 mnt in April, shrinking by 26.1% y-o-y but rising by 18.2% m-o-m.
Russian coal shipments to China could increase in the coming months, as Moscow is taking measures to prop up its coal sector – including discounting rail freights – to cushion against Western sanctions and unlock demand in key markets such as China.
Among recipient provinces in China, Guangdong in South China overtook the southeastern province of Fujian as the largest coal recipient in April, receiving some 5.16 mnt versus Fujian’s 4.78 mnt. The month before, Fujian had received 6.07 mnt of thermal coal, which suggests local utilities had slashed imports last month.
Looking ahead, the outlook for imported coal remains bleak. As of 21 May, prices of Chinese domestic benchmark 5,500 kcal/kg NAR thermal coal under Mysteel’s assessment had slumped to RMB 620/tonne (t) ($86/t) FOB northern ports with VAT, marking a 6% drop in under a month from RMB 660/t ($91.6/t) on 30 April.
By comparison, prices of seaborne thermal coal fell far more slowly – with Indonesian 3,800 kcal/kg NAR coal, for example, dipping by just $1/t over the same period – making imported cargoes less attractive, Mysteel Global observed.
“With domestic tags falling faster than global ones, the price gap is evaporating,” said a Guangzhou-based trader. “Unless overseas suppliers slash offers dramatically, imports will keep shrinking.”
Analysts widely expect May to register another month of import contraction, unless foreign suppliers react swiftly to the shifting price dynamics, or domestic coal tags unexpectedly rebound.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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