Asia's seaborne thermal coal market tightened in September 2026 as supply constraints from Indonesia and Russia coincided with strong gas-to-coal switching demand and winter restocking, pushing prices higher.

Asia's seaborne thermal coal imports fell both year on year and month on month in September 2026 to a five-month low, as supply and demand factors tightened simultaneously.

Kpler ship-tracking data showed Asia's seaborne thermal coal imports totaled 70.04 million tonnes in September 2026, down 7.25% year on year and 5.14% from the previous month. For January-September 2026, cumulative imports reached 635 million tonnes, down 2.41% from the same period a year earlier.

China's seaborne thermal coal imports in September 2026 were little changed from the previous month but fell sharply year on year. Imports stood at 23.88 million tonnes, down 14.8% from a year earlier and 0.11% lower than in August 2026. Cumulative imports for January-September 2026 reached 205 million tonnes, down 8.37% year on year.

China's weaker September import demand was mainly attributed to mild weather that curbed residential electricity consumption and strong hydropower output. However, the domestic supply-demand balance remained tight.

Domestic thermal coal supply in September 2026 was still limited, with output at some key producing regions falling sharply due to safety inspections. Northern inventories were at seasonal norms, and imports are expected to rebound this winter once power demand rises.

Kpler expects Asian coal demand to remain subdued through the end of 2026, though this largely reflects deferred rather than lost demand, with imports projected to recover in 2027.

India's seaborne thermal coal imports in September 2026 were 11.17 million tonnes, down 8.96% year on year but up 7.82% from the previous month. Cumulative imports for January-September 2026 totaled 108 million tonnes, down 11.53% year on year.

Since September 2026, Indian buyers have returned to the seaborne market for restocking as coal inventories at power plants plunged and the number of plants at critical levels rose sharply. Domestic coal output rose about 3% year on year to around 70 million tonnes in September 2026 as the monsoon season ended, meeting growing thermal power coal demand.

Strong power demand from summer cooling continued to pressure utility coal inventories, with days of supply declining steadily and stockpiles well below year-earlier levels, prompting utilities to accelerate restocking. Additionally, rising petroleum coke prices eroded its cost advantage over U.S. Northern Appalachian coal, pushing buyers toward alternative sources.

India's coal-fired power capacity is expected to increase by 4,500 MW in 2026 to build stable dispatchable generation capacity and meet the country's growing coal demand.

Japan's seaborne thermal coal imports in September 2026 were 9.17 million tonnes, up 9.98% year on year but down 13.87% from the previous month. South Korea's imports were 7.39 million tonnes, down 4.59% year on year and 15.04% month on month.

Japan's coal inventories were drawn down significantly during the summer, and with reduced Australian coal arrivals, stockpiles are expected to fall below seasonal norms. Kpler expects Japanese buyers to begin importing coal in late October. However, coal's clear cost advantage over natural gas meant coal burn was largely unaffected by weak summer demand.

South Korea's thermal coal imports have not grown in recent months as warmer summer temperatures curbed power demand. Despite slowing import demand, South Korea remains one of the world's largest coal growth markets, with its coal demand growth depending on incremental room for coal-fired generation in the power mix.

South and Southeast Asia saw a clear uptrend in thermal coal imports in September 2026. The Philippines imported 3.23 million tonnes, up 18.89% year on year but down 9.68% from the previous month. Bangladesh imported 1.84 million tonnes, up 12.7% year on year and 7.71% month on month.

The Philippines' import surge was driven by output cuts at the country's largest coal producer and constrained domestic supply, with the country expected to rely heavily on seaborne coal in 2027. Bangladesh shifted massively toward coal-fired generation amid soaring LNG prices and gas supply disruptions through the Strait of Hormuz, restarting idled plants and planning new coal-fired units, with seaborne demand set to remain high.

Vietnam's thermal coal imports slowed due to strong first-half purchasing and improved hydropower, making it one of the few Southeast Asian countries to post a decline. Vietnam imported 2.91 million tonnes of seaborne thermal coal in September 2026, down 15.41% year on year and 13.88% month on month.

On prices, uncertainty over thermal coal price direction has risen alongside natural gas market volatility. Kpler said Newcastle thermal coal FOB prices are expected to remain high in October before gradually easing as winter approaches. CFR prices at China southern ports and CIF ARA in October are also expected to decline after the winter heating season ends as gas prices soften.

Natural gas prices have deviated significantly from the historical coal-to-gas price ratio range. Coal is expected to maintain a price advantage over natural gas into 2027, but that advantage could weaken rapidly if gas prices soften.

Overall, Asia's thermal coal market in September 2026 was characterized by tightening supply and demand and peak winter prices. Low inventories, winter restocking and gas-to-coal switching supported demand, while Indonesian logistics constraints and Black Sea disruptions curbed supply, keeping prices elevated. However, with the end of winter, weaker energy prices and recovering Indonesian supply, coal prices are expected to gradually decline from 2027.