Strong domestic power demand in China as well as in India boosts seaborne thermal coal imports

China, the world’s biggest coal producer and importer, saw arrivals of seaborne thermal coal of 29.7 million metric tons in March, according to data compiled by commodity analysts Kpler. This was up from 23.03 million tons in February and was also higher than the 28.62 million in March 2023.

For the first quarter, China’s seaborne imports of the grade of coal used mainly to generate electricity were 80.64 million tons, up 17.2% from the 68.82 million recorded in the same period in 2023.

The strength in China’s imports is being driven by a combination of strong growth in power demand and by seaborne prices being competitive with domestic coal.

Official data showed China’s power consumption was 11% higher in January and February this year compared to the same months in 2023, and power generation rose 6.9% in 2023, outpacing the 5.2% growth rate for the economy as a whole.

It’s a similar story for India, where robust growth in power demand is fuelling coal imports, which reached 15.21 million tons in March, up from 14.09 million in February and 13.41 million in March 2023, according to Kpler.

First quarter thermal coal imports were 42.79 million tons, up 23.8% from the 34.57 million in the same period a year earlier. Coal demand is likely to remain elevated in India as the South Asian nation braces for more heatwave days than normal between April and June.

India’s imports of Russian thermal coal have been slipping, with March arrivals of 730,000 tons being the lowest since November.

A combination of Western sanctions on shipping and concerns over the safety of transiting the Red Sea has boosted the landed price of Russian coal in India.