Australia has long been South Korea’s top supplier of thermal coal. However, severe congestion at its key coal ports, coupled with weather disruptions, has weakened its dominance. This has created opportunities for rival suppliers, particularly Russia and Indonesia, who are now expanding their market share by offering competitive prices and timely deliveries.
Rising Role of Russia and Indonesia
Russia and Indonesia have rapidly increased their coal exports to South Korea. In August, Russia shipped 3.76 million metric tons (mt), up 54.6% year over year, while Indonesia exported 3.74 million mt, up 50.1%. Together, they accounted for nearly two-thirds of South Korea’s imports, overtaking Australia.
Their price advantage is significant Russian coal averaged $89.03/mt, and Indonesian coal was even cheaper at $68.95/mt, compared with Australia’s much higher $129.9/mt. For South Korean utilities facing high summer demand, cost savings and faster deliveries made these suppliers more attractive.
Australian Port Bottlenecks and Supply Disruptions
Australia’s coal exports to South Korea have been severely affected by logistical challenges. Imports fell from 3.1 million mt in April to just 2.08 million mt in June, largely due to congestion worsened by heavy rains from Cyclone Alfred.
While July saw a temporary recovery, August again brought sharp declines as disruptive rains hit New South Wales. These repeated delays pushed South Korea to diversify its coal supply sources. In contrast, Russian and Indonesian coal shipments remained more reliable, filling the gap left by Australia.
South Korea’s coal import dynamics are shifting, with Russia and Indonesia emerging as strong contenders to Australia’s long-held dominance. Their competitive pricing and steady supply amid Australia’s port congestion have reshaped trade flows. If weather-related disruptions persist, South Korea is likely to continue depending on these alternative suppliers, marking a long-term change in its coal sourcing strategy.
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Source: S&P GLOBAL
