- China’s seaborne coal shipments are expected to decline by 15% year-on-year in Q1 2025 due to weaker demand and increased domestic mining.
- Tonne mile demand has dropped 25% as China shifts to shorter shipping routes and overland imports from Mongolia and Russia.
- Despite the overall decline, Indonesian coal exports remain resilient, while Canadian shipments surged 42% year-on-year.
China’s coal imports via sea are projected to see a significant 15% drop year-on-year in the first quarter of 2025. Lower domestic demand and rising domestic mining activity have contributed to this decline. Thermal coal has been particularly affected, though coking coal shipments have also decreased. The slowdown is partly due to a 6% year-on-year drop in electricity generation from coal and a continued shift toward renewable energy sources.
Impact of Domestic Mining and Overland Imports
Chinese coal production has increased by 8% year-on-year, following a previous slowdown caused by safety concerns. Additionally, overland coal imports from Mongolia have continued to rise, reducing reliance on seaborne shipments. Rail-based imports, particularly from Russia and Mongolia, have further weakened the demand for coal transported by sea.
Effects on Shipping and Freight Trends
Tonne mile demand has fallen more significantly than overall volumes, down 25% year-on-year, as shorter shipping routes from Russia and reduced cargoes from Colombia have lowered total sailing distances. Despite the downturn, Indonesia has been the most resilient among major suppliers, with its coal exports to China declining by only 11%. Meanwhile, Canadian shipments saw an unexpected surge of 42% year-on-year. The panamax segment remains the most widely used for coal shipments, accounting for 57% of year-to-date volumes.
Future Outlook for China’s Coal Imports
The outlook for coal imports to China remains weak as the country continues expanding its renewable energy capacity, increasing domestic mining, and strengthening its rail connections with Mongolia and Russia. However, short-term spikes in import demand could still occur during periods of extreme weather or when renewable energy output falls below expectations.
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Source:Il Nautilus
