China’s Import arbitrage contracts, solidifying Russia and Indonesia’s dominance

The economic incentive for China to import thermal coal has deteriorated for the second consecutive week to the end of November, reshaping the competitive hierarchy among global suppliers. A combination of falling domestic Chinese prices and rising international freight rates has squeezed the import arbitrage, confirming a reversal of the strong gains seen since mid-October. Russian coal remains the most competitive option for Southeast China for the 17th straight week, though its discount has narrowed to $29.50/t. Indonesia holds the second-most competitive position, while South African and Australian mid-CV coals are similarly discounted but face market congestion and, in South Africa’s case, logistical barriers into China. Colombian coal stays uncompetitive with a ~$7/t premium. For India, Indonesian 4,200 GAR remains the most cost-effective origin, with delivered prices steady week-on-week.