- Shipments to India decrease to 4 mnt in Jun-Aug’26 from 9 mnt in Mar-May
- South Korean imports surge on summer power demand, concerns over LNG supply
South Africa’s thermal coal trade is undergoing a significant geographical shift, with weaker Indian buying forcing exporters to redirect tonnes towards Northeast Asia and Pakistan.
The change is striking. South African thermal coal shipments to India fell to around 4.2 mnt during June-August 2026 from 9 mnt during March-May, a contraction of roughly 53%. At the same time, South Korean imports of South African coal increased to about 2 mnt from just 0.4 mnt, while Pakistan’s purchases rose to 2.5 mnt from 2.1 mnt. Japanese intake also increased modestly.
The result is an increasingly important change in the destination mix of Richards Bay coal.
Historically, India has provided South African exporters with a large and geographically attractive market, particularly for mid-calorific-value coal consumed by sponge iron, cement, and industrial users. But stronger Indian domestic coal availability, seasonal monsoon weakness in industrial activity and reduced appetite from direct reduced iron producers have sharply curtailed imports.
The change is significant because India has historically been central to South African coal economics. Earlier RBCT data illustrate the relationship: India alone received almost 20 mnt of Richards Bay exports in 2023, while Asia represented nearly four-fifths of overall terminal exports.
India’s retreat changes Richards Bay pricing power
The collapse in Indian buying initially weakened South African pricing.
Richards Bay 5,500 kcal/kg NAR coal averaged around $90.55/t FOB during June-August, compared with $93.65/t during March-May. Sellers consequently had to broaden their destination base and become more competitive against Australian and other high-CV alternatives.
But this does not necessarily imply structurally weaker South African coal demand.
Instead, the tonnes are being redistributed.
South Korea has emerged as the strongest alternative buyer, supported by higher summer coal burn, concerns over LNG availability and competitive South African delivered economics. Korean utilities are also capable of consuming a relatively broad specification range, allowing some 5,500 NAR material to be blended with higher-CV coal.
This specification flexibility makes Korea particularly useful for Richards Bay exporters when traditional Indian mid-CV demand weakens.
Expensive LNG is helping South Africa penetrate Northeast Asia
The shift is being reinforced by developments in the global gas market.
Disruption to Middle Eastern LNG supply has pushed Asian spot gas prices sharply higher. Global gas-market analysis indicates Asian LNG prices remained materially above 2025 levels during 2026, encouraging gas-to-coal switching in several Asian power markets.
Qatar has even been forced to procure US LNG cargoes to meet commitments to Asian customers following disruption around the Strait of Hormuz, illustrating the severity of the supply dislocation.
For South African coal, this creates an important opportunity. When LNG becomes expensive, coal-fired generation becomes relatively attractive in markets such as South Korea and Japan. Buyers also place greater value on diversified, non-Russian high-CV coal supply.
South African coal therefore gains competitiveness not simply because Richards Bay prices fall, but because the alternative fuel against which it competes becomes substantially more expensive.
Pakistan provides another structural outlet
Pakistan is also becoming increasingly important. Imports of South African coal rose to around 2.5 mnt during June-August, and Pakistan benefits from reasonable freight economics from Richards Bay.
The country has traditionally imported South African coal for cement and industrial consumption, making it a useful balancing market when Indian demand weakens.
This creates a more diversified destination portfolio for South African suppliers: India for large-volume mid-CV demand; Northeast Asia for higher-CV and blending coal; Pakistan for industrial consumption.
That diversification reduces dependence on any single buyer. But India remains critical. The fundamental question is whether the current shift is temporary or structural.
Indian imports could recover after the monsoon as industrial activity strengthens and power-plant inventories decline. The attractiveness of South African coal will ultimately depend on its delivered price relative to domestic Indian coal and competing Indonesian, Russian and US material.
India therefore remains difficult to replace permanently.
The sheer scale of the June-August decline demonstrates why: the 4.8 mnt reduction in Indian purchases is much larger than the incremental volumes absorbed by Korea, Japan and Pakistan individually.
South African exporters can diversify, but replacing India’s demand completely requires several smaller markets to strengthen simultaneously.
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