Asia's thermal coal market future is increasingly splitting into two tracks: a robust domestic market in China, India, and Indonesia, and a fading seaborne trade elsewhere.

Together, the three giants accounted for more than 70% of global output and are expanding production to meet soaring energy demand, while exporters such as Australia, Russia, the U.S., and South Africa faced dwindling prospects.

At the CT Asia in Bali, industry officials from India and Indonesia voiced optimism about demand growth over the coming years, pointing even to new uses such as coal-to-chemicals.

Analysts noted that coal remains China's backbone for energy security, with domestic output hitting a record 4.04 billion tonnes in 2024 and on track for another high this year.

India's output surpassed 1 billion tonnes for the first time last year and could rise to 1.2-1.4 billion tonnes in the next few years under government-backed private mining expansion.

Indonesia also set a production record of 836 million tonnes in 2024, but growth is expected to cool as China ramps up domestic mining and accelerates renewables.

Meanwhile, the reliance on imports is steadily weakening. China and India, the world’s largest importers as well as producers, are working to curb their dependence on overseas supply. Although imports are unlikely to vanish entirely, the long-term trend points downward.

Japan and South Korea, two traditional buyers of high-quality seaborne coal, are also shifting away.

Japan is restarting nuclear reactors and adding solar capacity, while cheaper LNG from Qatar and the U.S. will erode coal's competitiveness. It was projected that coal's share in Japan's power mix to plunge from 28% in 2025 to just 9% by 2050.

South Korea is likewise planning to boost the share of nuclear power in its energy mix, and, much like Japan, is expected to lean more on LNG over coal for lower prices.

Still, the seaborne thermal coal market is not without bright spots. Southeast Asian countries such as Vietnam, Thailand, and Malaysia are expected to see rising import demand.

Ship-tracking data from Kpler showed that Vietnam's seaborne thermal coal imports reached a record 43.33 million tonnes in 2024, with another high likely this year. However, as progress on new coal-fired power projects slowed, the country's import demand is expected to peak soon.

Overall, the fundamental challenge facing major seaborne coal exporters is that, outside of China, India, and Indonesia, very few new coal-fired power plants are being built worldwide.

According to Global Energy Monitor, the total capacity of coal-fired power projects under construction globally stands at 274.5 GW, of which 262 GW, about 95%, are located in China, India, and Indonesia.

This means that future growth in coal consumption will be almost entirely absorbed within these three countries. Indonesia can redirect coal previously destined for export to meet domestic needs, while rising self-sufficiency in China and India will gradually erode the outlook for the seaborne thermal coal market.