July 28, 2026 - Asia boosted imports of thermal coal for a third straight month in July as major buyers such as China, Japan and South Korea bought more of the fuel to meet peak summer demand.

Asia, which buys about 90% of global seaborne thermal coal, is expected to import 73.16 million metric tons in July, up from 70.31 million in June and also above the 71.04 million ‌from July last year, according to data compiled by commodity analysts Kpler.

Thermal coal, used mainly to generate electricity, is experiencing stronger demand in Asia this year as it remains a cheaper alternative to liquefied natural gas. The Iran war has largely cut off shipments from Qatar, supplier of about 20% of the world's LNG, leading to a surge in spot prices.

China, the world's biggest coal importer, is leading the charge, with data from analysts DBX Commodities showing thermal coal arrivals of 28.14 million tons in July, the most this year and up from 25.67 million in June and 24.1 million in July 2025.

Thermal coal doesn't compete with LNG in China as far as power generation is concerned. Rather, the increase in imports is being driven by constrained domestic output coupled with rising electricity generation.

China's coal production dropped 9.7% in June from a year earlier to 380.88 million tons after safety inspections in the wake of the deaths of 82 people in a mine accident in Shanxi province on May 22, the country's worst mining disaster in 17 years.

China's thermal power generation, which is overwhelmingly coal with only a small amount of natural gas, rose 0.5% in June and 2.9% in the first six months of the year, according to official data.

While China's domestic coal output is expected to pick up in coming months, import levels may remain strong. That's because thermal generation is expected to grow in 2026 as the deployment of renewables, while rapid, isn't enough to meet an expected 5% rise in total electricity demand this year.

Japan, South Korea

Japan, the world's third-biggest coal importer, is expected to see arrivals of 10.46 million tons of thermal coal in July, according to DBX, up from 7.51 million in June and the highest since January.

South Korea, the fourth-biggest buyer, is on track for imports of 8.54 million tons in July, ‌up from 6.08 million in June and the highest since August last year.

The stronger demand is helping drive prices with the weekly index for 6,000 kilocalorie per kilogram (kcal/kg) Australian thermal coal at Newcastle Port reaching a four-week high of $132.76 a ton in the seven days to July 24, according to prices compiled by globalCOAL.

This grade is mainly bought by Japan and South Korea, while China favours lower-grade fuel from top exporter Indonesia as well as from other exporters such as Russia and Australia.

Singapore Exchange contracts for Indonesian coal with an energy content of 4,200 kcal/kg ended at $61.97 a ton on Monday, down from the recent three-year high of $65.77 on June 26, but still up 38% from the low so far this year of $45.00 from early January.

Price rises help explain why one major importer isn't buying more. India, the second-biggest importer, is expected to see arrivals of seaborne thermal coal drop to 10.88 million tons in July, down from 12.3 million in June and the lowest since August last year.

India would probably want to import more coal if prices were lower, given record high electricity demand amid the absence of stronger monsoon rains.

This has led to strain on domestic coal supplies, with coal stocks at power plants dropping to just 14 days of operation as of mid-July, when they are more typically between three and four weeks' worth of inventories.

The recent easing in prices for Indonesian coal, which is favoured by India's utilities, may lift import demand in coming weeks, but it would likely take a more sustained drop for imports to rise substantially.