Asia's seaborne thermal coal imports in August climbed to a nine-month high, continuing the upward trend from July.

However, overall volumes still lagged last year's levels. The continent's seaborne thermal coal imports last month totaled 80.94 million tonnes, down 7.53% YoY but up 9.69% month on month (MoM).

Among this, China imported 29.8 million tonnes of seaborne thermal coal, down 5.03% YoY but hiking 24.26% MoM to the highest so far in 2025. The increase was attributed to stronger power demand, falling raw coal production, and output curbs alongside stricter safety checks for the military parade.

With the end of summer peak demand, however, power demand gradually normalized. Rising domestic production is expected to drag imports lower in September.

It is worth mentioning that a sharp retreat in portside stocks from May's highs reflected easing oversupply concerns. Meanwhile, weaker-than-expected hydropower output and uneven rainfall supported coal-fired power demand.

In August, India imported 11.5 million tonnes of thermal coal, down 6.64% YoY and 5.48% MoM to a nine-month low, according to Kpler's cargo-tracking data. Power plants relied heavily on existing inventories during the monsoon season.

Coal has been placed under the 18% Goods and Services Tax (GST) slab as part of the sweeping "GST 2.0" reforms approved by India's GST Council on September 3. The move marks a sharp jump from the earlier 5% rate, as it comes alongside the scrapping of the existing compensation cess of 400 rupees per tonne, effective September 22.

Though appearing neutral, the adjustment makes imported coal less competitive than domestic supply, tilting incentives toward local production and reducing reliance on imports.

Meanwhile, Japan, Asia's third largest coal importer, and South Korea saw further increases in thermal coal imports in August. Japan imported 10.78 million tonnes, climbing 21.05% YoY and 3.86% MoM. South Korea's thermal coal imports up 18.57% YoY and 20.14% MoM to 9.26 million tonnes.

Japan's power demand remained largely flat this year, while coal imports rebounded in August after June’s declines caused by disrupted Australian supply.

South Korea's extreme summer temperatures boosted power demand, while cost-effective and sufficient Russian coal supplies encouraged a switch from natural gas to coal. In August, coal-fired capacity was estimated at 27 GW, offsetting nuclear output declines and squeezing gas's share in the power mix. Japan also reported higher summer temperatures than in previous years, but coal-fired power generation remained flat, keeping coal imports broadly stable.

In Southeast Asia, Vietnam's thermal coal imports down to an intra-year low due to robust hydropower output, totaling 3.23 million tonnes in August, down 7.32% YoY and 11.37% MoM.

The Philippines' August imports increased significantly to 3.13 million tonnes, up 8.86% YoY and 5.54% MoM. Despite calls for halting coal mining, coal-fired power accounts for over 60% of the country's power mix, making such proposals highly impractical. Philippine's thermal coal imports are anticipated to total about 37 million tonnes in 2025.

Other Southeast Asian importers posted mixed import demand in August. Malaysia imported 3.47 million tonnes of thermal coal, up 8.42% YoY and 13.31% MoM. Thailand received 1.41 million tonnes, down 7.96% YoY and 16.37% MoM.

Overall, Asia's thermal coal imports in August hit a peak, driven by extreme weather and strong power demand. But as temperatures cool, demand is expected to normalize and domestic supply in key markets to recover, weighing on imports in the short term. Winter heating demand will be a key driver for the next rebound in imports.