China’s thermal coal imports are set for a substantial rise this month, reaching 25.63 million tons, which would be the highest monthly increase since last December, Kpler reported, as cited by Reuters’ Clyde Russell.
The estimated August total would compare to thermal coal imports of 22.77 million barrels daily for July. More than half of the August imports would come from top exporter Indonesia, at 16.13 million tons, which would be the highest in five months. Imports from Australia are seen at 5.84 million tons, marking their third consecutive increase, Russell noted.
The increase in imports follows a dip in domestic coal production, which was down by 3.8% last month. Coal production at home over the first seven months of the year, however, was up by the same percentage.
The July dip was the result of government intervention to curb oversupply and unfavorable weather, including heat and heavy rains that made production of coal problematic. Higher electricity generation rates from thermal power plants also helped reduce oversupply. Thermal power generation rose by 4.3% year-over-year in July.
China’s government has launched a campaign against overcapacity in numerous industries, which is leading to cut-throat competition, often referred to by the media as a race to the bottom. In coal, the government campaign has taken the form of mine inspections to make sure they are not producing over government-issued quotas.
India, meanwhile, is importing less coal this month, as generation from other sources rises, the Reuters report noted. According to Kpler data, August coal imports to the subcontinent are set to slide to 9.74 million tons, which would be down from 11.99 million tons last month. It would also be the lowest import rate since February 2023. The decline was attributable to a 22.4% increase in hydropower generation and a 14.4% increase in wind and solar generation.
By Irina Slav for Oilprice.com
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