LAUNCESTON, Australia, Oct 30 (Reuters) - Prices of the main grades of seaborne thermal coal in Asia have continued their modest recovery from four-year lows, but the gains are coming at the expense of volumes as major importers trim demand.

China, India, Japan and South Korea, the world's four biggest coal importers, are all on track for lower arrivals in October than September, according to data compiled by analysts DBX Commodities.

Prices for the main Australian and Indonesian grades of thermal coal have climbed since bottoming out in early June, having been on a declining trend since October 2023.

While lower prices did boost import demand in July and August, the higher prices now appear to be resulting in buyers pulling back.

China's imports of seaborne thermal coal, the fuel used mainly to generate electricity, are estimated by DBX at 28.17 million metric tons in October, down from 28.43 million in September and also below the 33.53 million from October last year.

India, the world's second-biggest coal importer, is forecast to import 13.35 million tons of thermal coal in October, down from 13.76 million in September and below the 13.82 million from October last year.

Third-ranked Japan is forecast by DBX to import 9.52 million tons in October, down from 10.44 million in September and 9.94 million in October 2024.

South Korea, the fourth-biggest coal importer, is on track to see arrivals of 6.45 million tons in October, down from 8.19 million in September, but up from the 5.92 million from October last year.

Given that there is a lag of several weeks between when cargoes are arranged and physically delivered, it makes sense that the declining imports in October reflect the higher prices seen from July onwards.

PRICE RECOVERY

The price of Australian coal with an energy content of 5,500 kilocalories per kilogram (kcal/kg), a grade popular in both China and India, was assessed by commodity price reporting agency Argus at $76.34 a ton in the week to October 20.

It has risen 16% since the four-year low of $65.72 in early June and is now at the highest since the week to March 3.

Indonesian coal with an energy content of 4,200 kcal/kg was assessed by Argus at $45.26 a ton in the seven days to October 20, having gained 12% since its four-year low of $40.45 in the week to July 4.

Japan and South Korea favour higher-grade Australian thermal coal, and the price of 6,000 kcal/kg fuel at Newcastle Port was assessed by globalCOAL at $105.34 a ton on Wednesday, up from the $103.74 for last week.

However, the Newcastle price has been largely flat in a narrow range around $104 a ton in recent weeks.

This means the lower imports in Japan and South Korea are more likely a result of weaker demand in the shoulder season between the peaks of the northern summer and the upcoming winter.

The recent trends in imports and prices in Asian seaborne thermal coal illustrate that the market can be broadly divided into the price-sensitive buyers such as China and India, and the more seasonally driven consumers such as Japan and South Korea.