Asian thermal coal prices find support as import demand rebounds and supply risks rise at the same time
📌 Asia’s thermal coal market is heating up into late May, with Reuters citing Kpler data estimating regional imports at 76.26 million tons, up 23% from the previous month and above the same period last year.
🔎 China remains the key focus, with May imports estimated at 22.63 million tons, the highest level since January. This comes as domestic output in April fell sharply from the previous month, forcing the market to reassess the supply-demand balance.
⚠️ The coal mine accident in Shanxi on May 22 could lead to stricter safety inspections in China, adding short-term supply risk. This is a more important price-supportive factor than the isolated impact of geopolitical tensions.
💡 The Iran war and risks around Hormuz mainly affect coal indirectly through the LNG market. When LNG becomes more expensive or less stable, countries such as Japan and South Korea have more incentive to switch back to thermal coal to secure power demand.
📈 Indonesian 4,200 kcal/kg coal has risen to $64.43 per ton, its highest level in three years, while Australia’s Newcastle coal is around $133.09 per ton, near an 18-month high. The fact that imports are still recovering despite higher prices suggests demand is not purely speculative.
✅ In the short term, Asian thermal coal still has room to stay elevated if China keeps domestic output low, India enters a stronger power-consumption phase, and Indonesia adds more export uncertainty from July. The main risk is a quick cooling in LNG prices if tensions around Hormuz ease.