Asia's seaborne thermal coal imports in July rebounded sharply from the previous month, rising nearly 10% as China, Japan, and South Korea all brought in more cargoes.

However, overall volumes still lagged last year's levels, reflecting the region's mixed demand outlook. The region's seaborne thermal coal imports last month totaled 72.27 million tonnes, down 9.13% YoY but up 9.94% month on month (MoM).

Among this, China imported 23.61 million tonnes of seaborne thermal coal, down 36.92% YoY but rebounding 23.88% MoM.

The short-term lift came as recent policy measures temporarily supported domestic coal prices, but the broader demand outlook remained subdued due to rising domestic production and the accelerating displacement of coal-fired power by renewables.

Kpler noted that the market impact of ongoing domestic coal mine overproduction checks remains to be seen, and the outlook for China's coal imports in the coming months is still pessimistic. After a 3% year-on-year increase in domestic raw coal output in June, production in July and August is also expected to remain strong.

Meanwhile, with China's crude steel output forecast to fall 3% on the year in the second half of 2025, seaborne metallurgical coal imports may also decline, especially as domestic production continues to grow and Mongolian coal railings stayed at high levels.

In July, India imported 11.68 million tonnes of thermal coal, down 15.23% YoY and 19.17% MoM, according to Kpler's cargo-tracking data.

The drop was due to high inventories at ports and power plants, as well as weaker demand for power generated from blended coal. Local rainfall and milder weather also reduced cooling demand, while renewable energy growth further weakened coal demand.

Government data showed that in the first half of 2025, India's coal-fired power generation fell nearly 3% year on year, while renewable generation surged 24.4%. After the monsoon season, however, industrial restocking and increased steel output are expected to lift metallurgical coal demand, potentially boosting imports again.

Meanwhile, Japan, Asia's third largest coal importer, and South Korea saw a surge in thermal coal imports in July. Japan imported 10.2 million tonnes, dipping 0.15% YoY but jumping 58.14% MoM. South Korea's thermal coal imports up 11.6% YoY and 34.97% MoM to 7.68 million tonnes.

Russian coal has been more price-competitive, driving sustained growth in South Korean imports in recent months. With limited demand growth potential in China, Japan, and other regions, Russian producers have increased shipments to South Korea.

In Southeast Asia, Vietnam's thermal coal imports slowed due to weak fundamentals, totaling 3.49 million tonnes in July, down 24.24% YoY and 23.44% MoM.

Falling coal consumption has been weighing on end-user demand, and earlier growth was largely for stockpiling rather than immediate use.

Elsewhere in the region, trends were mixed: Malaysia imported 2.98 million tonnes (+9.12% YoY, -14.77% MoM), the Philippines imported 2.96 million tonnes (-13.89% YoY, -7.11% MoM), and Thailand imported 1.72 million tonnes (+86% YoY, +32.25% MoM).

In the short term, China's macro controls and peak-season demand, the potential risks from Russian energy trade sanctions, and the pace of renewable energy grid integration will be key factors shaping the market in the third quarter of 2025. However, with China's production expected to rise and its import demand outlook still bearish, Asian thermal coal imports are unlikely to see significant growth in the near term.