China and Japan Drive Asian Thermal Coal Imports to Six-Month High as India Posts Four-Year Low
Kpler data show Asia's June thermal coal imports on track for a six-month high, while India's purchases fall 12% year on year and widen the regional split.
Newcastle thermal coal stood at $119.75 a ton on Tuesday (2026-07-28), down sharply from a mid-June peak of $150.25 but still above pre-conflict levels. The pullback reflects some cooling in spot demand, but the underlying import volumes show how far Asia's appetite for seaborne coal shifted after the Iran conflict began in late February. Kpler data show the region's thermal coal arrivals on track to reach 77.37 million metric tons in June, the most in six months and up 22.3% from the 63.24 million recorded in June 2025.3
China is driving the bulk of that increase. Domestic output has run soft, pushing utilities toward seaborne supply rather than running down stocks. Thermal power generation in China rose 2.1% in May and 3.4% across the first five months of 2026, maintaining steady coal burn even as mine production lagged.3
Japan and South Korea are buying for a separate reason. The US-Israel strike on Iran on February 28 (2026) triggered Tehran's closure of the Strait of Hormuz, stranding roughly 20% of global LNG supply produced by Qatar. Spot LNG for delivery to North Asia surged 143%, from $10.40 per million British thermal units in the week ending February 27 (2026) to $25.30 by March 20 (2026). It eased to $15.30/MMBtu in the week ending June 19 (2026), still 47% above its pre-war level. Coal became the cheaper hedge.3
The Newcastle market reflected that shift. High-grade Australian thermal coal — the benchmark grade for Japanese and South Korean utilities — climbed 30% from $115.96 a ton at the start of the conflict to $150.25 in mid-June. By Wednesday (2026-06-24) it had retreated to $134.09 per globalCOAL's assessment, still 15.7% above where it was before the fighting started.3
Japan's buying has been sustained. Kpler forecasts arrivals of 7.82 million tons of thermal coal for the country in June, up 33% from 5.89 million in the same month a year earlier and a third consecutive monthly rise. Japan is the world's third-largest coal importer, and its utilities have not stepped back while the Hormuz situation remains unresolved.3
India sits outside that story entirely. The world's second-largest thermal coal importer took in 65 million tons in January through May 2026, a 12% annual decline and a four-year low, according to BigMint. Power demand surged 11.2% to a two-year high in May, per grid regulator Grid-India — but domestic coal is meeting more of it. India has raised the share of local coal to 50% at many plants previously designated to burn imported fuel.1,2
Renewable generation is also moving faster than most expected. Total power generation in India grew 5% in January through May versus a year earlier, while renewables climbed 22% over the same period. Thermal output in May rose 10% year on year — the highest rate since May 2024 — but utilities have drawn on Coal India's domestic supply rather than seaborne cargoes. India's stated target is to cut thermal coal imports by at least 30% in 2026.1
The pivot for the rest of Asia is whether China's domestic output recovers enough to slow its seaborne buying. Chinese utilities have consumed coal faster than domestic mines have produced it, but if mine output catches up as summer peak demand passes, China's appetite for spot cargoes could soften quickly, removing the biggest engine behind the June surge. Newcastle at $119.75 on Tuesday (2026-07-28) is already more than $30 below its mid-June high — a signal that some traders are already positioning for that possibility.3