- China has imported 52m tonnes less thermal coal so far this year, reducing capesize demand.
- Domestic coal output and renewable expansion continue to displace seaborne coal.
- Any late-year rebound may benefit smaller vessels more than capes.
Thermal coal imports into China are trailing last year by more than 14%, resulting in a drop of over 50m tonnes so far in 2025. With China accounting for around a third of global thermal coal shipments, this slowdown has weighed directly on capesize tonne-days and tonne-miles, which have remained below 2024 levels for much of the year.
Domestic Output and Renewables Reshape Demand
The shift is driven by stronger domestic coal production, particularly earlier in the year, and the rapid pace of renewable energy installations. Coal’s share in China’s power generation continues to edge lower as the country transitions toward non-fossil sources, reducing the role of imported thermal coal in the overall energy mix.
Even where total electricity consumption has risen, domestic production has absorbed much of the demand, limiting the need for additional imports.
Short-Term Lift Possible, but Not for Capes
Demand traditionally rises through winter, and with domestic production slowing in recent months, China may increase coal imports to maintain stock levels. Most of that additional volume is expected to come from Indonesia, supporting panamax movements rather than capesize trades.
This shift reflects a gradual rebalancing — away from long-haul coal cargoes and toward shorter regional routes.
Long-Term Trend Remains Downward
While short-term fluctuations are likely, the long-term outlook suggests continued pressure on China-bound capesize coal demand as renewables gain ground and domestic supply remains strong.
The global coal trade will not disappear overnight, but the capesize share of it is set to shrink, giving more weight to smaller bulk carriers.
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Source: Breakwave Advisors
