Nikolaos Tagoulis, head of research at Intermodal, stated that the global thermal coal market is heating up with increasing demand in India and ASEAN countries, particularly Vietnam and the Philippines. At the same time, it is expected that China's seaborne thermal coal imports will decline.
Changes in Coal Production and Imports
China, which accounts for about 30 percent of global coal production, is reducing seaborne thermal coal imports due to rising international prices and expectations of improved domestic production. Meanwhile, safety restrictions and mining inspections have harmed production in recent months. However, government orders to expedite mining activities in Shanxi, which constitutes nearly 30 percent of China's coal production, indicate improved domestic access.
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Challenges and Opportunities in Coal Supply
On the supply side, Indonesia, as the largest exporter of thermal coal in the world, faces challenges. Although production quotas have increased in October, output remains significantly lower than last year's levels. On the other hand, commitments to the domestic market allow miners to prioritize local supply over exports. These conditions, along with low water levels in Central Kalimantan due to the El Niño phenomenon, have limited access to terminals and affected coal supply.
Australia, which along with Indonesia accounts for nearly 70 percent of global thermal coal exports, is expected to see export volumes remain relatively stable. Meanwhile, Colombia is strengthening its position in the Atlantic thermal coal market due to new European demand and high gas prices. European thermal coal imports in October increased by 79 percent compared to last year.
Overall, Colombia's thermal coal exports have increased by nearly 11 percent from January to October and are expected to continue growing by 8 percent by 2027. This is while weak Asian demand is offset by strong purchases from European and Atlantic buyers.
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