Coal Imports Surge to Near-Record as Asia and Europe Scramble to Replace Lost LNG

Iran War Triggers 1973-Style Coal Comeback Across Asia and Europe The US-Israeli strikes on Iran in late February knocked out roughly 20% of global LNG supply in a matter of weeks, and the market response is following a script traders last read fifty years ago: when the preferred fuel disappears, coal comes back. Coal shipments to South Korea, Japan, and the European Union surged 27% year-on-year last month, according to BIMCO data — the world's largest shipowners' association — and global coal imports are tracking toward their third-highest monthly level on record.⁴ The parallel to 1973 is not rhetorical. After the Arab oil embargo, coal displaced oil in power generation across the industrialised world, a substitution that took a decade to partly unwind. The current shock is moving faster. Japan and South Korea, two of the world's largest LNG importers, have already pivoted their procurement back toward coal as Hormuz disruptions make LNG economically and physically difficult to source. For those two buyers, the calculus is simple: coal is available, coal is deliverable, and coal is not passing through a war zone.^7,5 China's April data illustrates the structural tension this creates. Coal power generation rebounded for the fourth consecutive month, and total power generation grew 6.6% year-on-year, driven partly by weak wind conditions and extended nuclear refuelling outages. Hormuz disruptions have directly hit China's energy import flows, with crude oil imports falling around 20% year-on-year and natural gas imports down 13% in April. Meanwhile, thermal power commissioning in Q1 surged more than 160% year-on-year, reaching a record high — a data point that will make clean-energy advocates uncomfortable.³ This is happening just one year after Carbon Brief reported that coal power fell 1.6% in China and 3.0% in India in 2025 — the first simultaneous drop in half a century — with those two countries having driven 93% of the global rise in CO2 emissions from power between 2015 and 2024.⁶ The 2025 inflection looks, at best, interrupted. Europe is facing the same direction but running into different constraints. European coal consumption for power generation is likely to rise sharply in Q2 compared with pre-Iran war estimates, but capacity limits and strong renewable output will cap how much coal can actually displace gas, analysts told Montel. The continent mothballed significant coal capacity over the past three years, and not all of it can be brought back quickly.¹ Wood Mackenzie flags that the energy security response is already delaying coal plant retirements across Asian and European markets — decisions made this year that will shape the capacity stack well into the 2030s.⁴ The contrarian case sits in the German power market, where baseload front-month prices carry bearish signals on demand, weather, and supply simultaneously. That triple-negative configuration suggests that in Europe's largest economy, the coal revival may be less pronounced than headlines imply — renewable generation and weaker industrial demand could absorb more of the gas shortfall than the bullish coal narrative allows. Traders leaning hard into European coal exposure should watch German baseload more carefully than spot coal import numbers. The cross-sector read is arguably more important than the direct coal trade. EDF stated this week that electrification is now "imperative" for France in response to the energy shock, announcing a plan to grow power demand by 5.5 TWh — around 1% per annum — through heat pumps and electric vehicles, with EDF offering turnkey industrial grid connections to accelerate uptake. New heat pumps and electric trucks could add 0.5 TWh per year on their own.² The policy implication: governments that burned coal through this crisis will also accelerate the electrification build-out that eventually makes coal redundant. The near-term trade and the medium-term structural story point in opposite directions. What to Watch The near-term signal is whether EU Q2 coal burn actually runs into the capacity ceiling analysts are projecting, or whether operators find ways around it — that outcome lands in load data over the next four to six weeks.¹ Watch coal prices against the spread to TTF: if LNG shortages persist and coal prices remain well below their 2022 Russia-Ukraine highs, the fuel-switching incentive stays in place and import volumes should keep climbing.⁸ On the structural side, track Wood Mackenzie's timeline for coal plant retirement deferrals — each announcement locks in capacity that was previously being scheduled out of the market.⁴ EDF's electrification ramp is a week-ahead watch for European power market structure: 5.5 TWh of new demand over time reshapes the baseload curve and the seasonal spread, particularly if heat pumps are winter-loaded.²