By Clyde Russell
LAUNCESTON, Australia (Reuters) – China has imported a record amount of coal in 2024, driving global oil exports to record levels. So why are some coal sellers starting 2025 in a blue funk?
For other coal exporters, China is their savior and tormentor, as record import volumes are possible only because sea prices have been falling for several years.
Export prices of coal have fallen to remain competitive with domestic prices in China, the world's largest producer and importer of coal, driving developments in global coal markets.
China's coal sales rose to an all-time high of 542.7 million metric tons in 2024, up 14.4% from 2023's 474.42 million tons, according to data released Monday.
There were many factors driving the increase, including the development of hydroelectric power, which increased the demand for thermal coal for power generation.
However, it is likely that the main factor behind China's record imports has been the drop in seabed coal prices from top traders Indonesia and Australia.
Indonesian coal with an energy content of 4,200 kilocalories per kg (kcal/kg) was assessed by the commodity price reporting agency Argus at 49.97 tons in the week to 30 Dec.
Australian 5,500 kcal/kg coal, a grade favored by Chinese buyers, was tested at Newcastle Port by Argus at 81.77 tonnes in the week to 27 Dec.
Prices started 2025 softly, with the Australian grade falling to $81.01 a ton in the week to Jan 10, while Indonesian fuel went to $49.67.
The drop in seaborne hot coal prices came as domestic prices in China were also weak, with consultants SteelHome assessing coal at the port of Qinhuangdao at 775 yuan ($106) a tonne on Monday.
This was up slightly from a recent low of 765 yuan a tonne on Dec 27, which was the weakest since June 2023, and down 17.6% from a 2024 high of 940 yuan at the end of February.
There's a bit of a chicken and egg situation with coal prices and import volumes, and it's not clear if the strong export rate is due to low prices, or if soft prices have allowed volumes to remain strong.
In China, imports picked up in the second half of the year as seawater prices fell, with the strongest month being 54.98 million tons in November.
But India, the world's second largest coal producer, has shown a different pattern, with prices falling in the second half of 2024 as prices continue to fall.
India's coal imports were 228.72 million tonnes in 2024, down 2.7% from a record 234.99 million tonnes in 2023, according to data compiled by commodity analysts Kpler.
UNCONFIRMED 2025
The question for coal producers is whether offshore demand will be as strong in 2025 as it was in 2024, and the outlook is less certain.
Global coal sales were 1.279 billion tons in 2024, up from 1.276 billion last year, according to Kpler.
China may import less by 2025, with the China Coal Transportation and Distribution Association saying at a seminar last week that it expects imports to fall to 525 million tons.
India may see lower imports if domestic production continues to rise and the government continues policies to encourage more domestic consumption.
Without two major buyers, it's hard to make a bullish case. Demand from other major Asian buyers, Japan and South Korea, may remain stable.
European sales fell for the second year in 2024 to 88.52 million tons from 108.98 million in 2023, according to Kpler data.
Despite the loss of Russian pipeline supply, it is unlikely that utilities will turn back to coal due to environmental concerns.
The views expressed here are those of the author, a Reuters columnist.