China Slashes Coal Import Forecast as Indonesia Curbs Bite and Demand Softens

China Slashes Coal Import Forecast as Indonesia Curbs Bite and Demand Softens Beijing's main coal industry body cut its 2026 import target to 465 million tons just weeks after Indonesia restricted shipments, as April buying fell sharply on weak demand and port inventory overhang. The China Coal Transportation and Distribution Association on Monday cut its 2026 import forecast to 465 million tons, down from 480 million tons issued just three weeks ago, after Indonesia moved to restrict coal exports in an effort to support domestic prices. The revision signals that Beijing's coal establishment sees no near-term demand catalyst strong enough to offset a deliberate pullback from overseas supply.⁵ That matters because April data already confirmed the trend. China's coal purchases fell in the month after a record-breaking first quarter that had defied expectations of a slowdown, dragged by weak demand and unfavourable import economics, according to Petromindo. The first quarter's pace was never going to hold; the question now is how far April's softness extends into Q2.⁷ The domestic supply picture only partly explains the import retreat. China's coal production slipped 1% in April to 385.63 million tons, according to Reuters citing official statistics, pulling back from an all-time high set in March. Over the first four months of 2026, output came to 1.58 billion tons, a 0.1% decline. The marginal production dip has not translated into any visible tightening at the port level.⁴ Analysts attribute the weakness to narrowing import margins and port inventory surpluses. The price gap between domestic and seaborne coal has continued to erode buying incentives, and inventories remain high enough that traders see little urgency to replace Indonesian barrels lost to the export curbs.⁶ The Hormuz disruptions introduced an offsetting force in April. Strait shipping constraints cut China's crude oil imports by roughly 20% year-on-year and natural gas by around 13%, according to Centre for Research on Energy and Clean Air analysis. The resulting fuel shortfall pushed coal power higher for the fourth consecutive month, with total Chinese power generation rising an estimated 6.6% year-on-year.³ That coal power rebound looks partly circumstantial. Thermal power commissioning in the first quarter surged more than 160% year-on-year to a record high, adding generation capacity into a market where coal has been filling a gas-supply gap rather than gaining ground on structural demand trends. Solar additions fell 31% year-on-year in Q1, though that largely reflects a high comparison base from early 2025.³ European utilities are reading the same dislocations differently. EU thermal coal imports are set to reach a five-month high in April, with provisional Kpler vessel-tracking data pointing to deliveries of 2.27 million tonnes — up 25% on the month and 10% on the year. Colombian barrels led the supply increase, rising 48% from March's total to 1.12 million tonnes, accounting for the bulk of the gain. Utilities are building stocks against the risk of further gas price spikes tied to the Middle East conflict.¹ Analysts told Montel that Q2 German gas prices could average EUR 46.35/MWh, up EUR 13.20 or 40% year-on-year, with spot power prices following up around 17%. The incentive to hold coal buffer stocks is real.² The catch is capacity. Analysts told Montel that even with demand running well above pre-Iran war estimates, limited generation capacity and strong renewable output will cap the increase in European Q2 coal burn. More coal is being imported than can efficiently be burned.⁸ For traders, the near-term read bifurcates cleanly by geography. China's import softness is both cyclical and deliberately managed; the CCTDA's revised forecast signals that Beijing is comfortable running inventory lower rather than chasing seaborne tonnes at current prices. Indonesia's export restrictions may lift benchmark prices modestly at the margin, but port inventory overhang and subdued buying appetite will limit the move. The catalyst to watch is how quickly the Hormuz premium dissipates: if gas supply normalises through Q2, the coal-power uplift currently propping up Chinese burn could reverse faster than the thermal capacity buildout implies, removing one of the few demand-side supports visible in the data.^5,3⁶