China and India, the two largest coal importers in Asia, both increased thermal coal imports in November, although rising prices may limit further growth, according to a Reuters report.

China, the world's largest coal importer, brought in 30.96 million tonnes of coal in November, an increase from October's 29.18 million tonnes, the report cited data from analysts at DBX Commodities as saying.

While imports grew for three consecutive months, the volumes remained significantly lower than the 38.19 million tonnes imported in November 2024.

India, the world's second-largest coal importer, imported 13.01 million tonnes of coal in November, up from 12.38 million tonnes in October and above 12.24 million tonnes in November 2024, according to DBX data.

The import increase in both two countries was mainly driven by a sharp drop in seaborne thermal coal prices in June, which hit four-year lows. Australian 5,500 Kcal/kg NAR coal fell to its lowest level since May 2021 in the week ending June 6.

The popular grade for Chinese buyers then traded sideways until August, after which demand from Chinese buyers picked up, pushing prices up to $86.96/t by the week ending November 21, a one-year high. However, prices later retreated.

Imported coal prices closely reflect trends in China's domestic coal prices. After rallying since mid-June, the price surge recently stalled.

China's coal production was constrained due to the country's anti-involution policy. In October, China's coal production totaled 406.75 million tonnes, down 2.3% year on year, below September's 411.51 million tonnes, according to data from the National Bureau of Statistics of China (NBS) on November 14.

Given expectations of historically high power demand this winter, China's power plants may burn more coal, maintaining robust imports.

However, the country also announced a 230-million-tonne coal stockpile, providing 35 days of inventory coverage. This suggests that additional imports may not be necessary in the short term.

DBX expects China's December imports to reach 31.33 million tonnes, modestly higher than November but still below last year's 35.03 million tonnes.

India's thermal coal imports typically peak in the summer, with smaller growth in the winter months. This winter, import demand may decline due to a reduction in coal-fired power generation, driven by lower industrial demand and higher renewable energy production.

India's coal-fired power generation declined 5.8% on the year in November, with seven out of the first eleven months of the year showing year-on-year decreases, according to data from Grid-India.

DBX expects India's imports to fall to 12.15 million tonnes in December, down from 13.01 million tonnes in November.