Domestic Supply Constraints Keep China’s Thermal Coal Imports Elevated in July
Time:2026-08-24 10:47:38 Source:
China’s thermal coal imports edged down month on month in July 2026, while remaining significantly higher year on year, although the growth rate narrowed from the previous month. Imports from all major supply sources increased from a year earlier.
According to the General Administration of Customs, China imported 29.112 Mt of thermal coal (non-coking coal) in July, up 12.03% YoY but down 4.85% from 30.597 Mt in June.
The decline in domestic coal production following earlier mine accidents in Shanxi and other regions, along with subsequent safety inspections, continued to constrain supply. National raw coal production fell 10.1% YoY in July, with average daily output also dropping to a relatively low level in recent years. Amid strict controls on overproduction, coal miners remained cautious about raising output, limiting the flexibility of domestic supply and supporting demand for imported coal.
Meanwhile, July coincided with the peak summer coal consumption season, providing some support for power plant restocking. The sustained rise in domestic coal prices following the earlier mine accidents also temporarily improved the price competitiveness of imported coal against domestic supplies, further encouraging end-users to purchase imported coal.
However, the growth in thermal coal imports narrowed noticeably in July, with imports also declining month on month. On the one hand, some import demand had been brought forward amid expectations of high temperatures and tightening domestic supply, leading traders and end-users to advance their purchases. On the other hand, increased rainfall in southern China and stronger hydropower generation reduced the need for thermal power generation. Relatively low daily coal consumption at power plants, together with inventories remaining above year-earlier levels, also weighed on restocking demand.
By origin, China’s major thermal coal suppliers in July were Indonesia, Australia, Russia, Mongolia and Colombia, with the top five sources accounting for 99.6% of total imports.
Indonesia remained the largest supplier, with China importing 15.392 Mt of thermal coal from the country in July, up 17.94% YoY but down 6.48% MoM, accounting for 52.9% of total imports.
Imports from Australia reached 6.066 Mt, up 8.14% YoY and down 4.69% MoM, accounting for 20.8%.
Russian thermal coal imports totaled 4.846 Mt, up 8.81% YoY and 33.48% MoM, accounting for 16.6% of total imports.
Imports from Mongolia reached 2.546 Mt, up 26.16% YoY but down 24.5% MoM, accounting for 8.7%. The MoM decline in Mongolian coal imports was mainly due to the Naadam Festival in mid-July, when China-Mongolia border crossings were temporarily closed, disrupting customs clearance. Imports, however, remained at a relatively strong level YoY.
In the first seven months of 2026, China imported 188 Mt of thermal coal, down 3.73% YoY.
Entering August, domestic coal supply remains constrained. With stringent safety inspections and continued production controls, domestic coal output and supply releases are likely to remain limited in the short term. Although increased rainfall, milder temperatures and stronger hydropower generation have recently weighed on thermal coal demand, continued supply constraints should provide support for demand for imported coal.
Notably, recent import coal tender activity indicates that a relatively high volume of coal is still scheduled to arrive in China in August, suggesting that previously purchased imported coal will continue to arrive in substantial quantities. Overall, while weaker end-user demand may weigh on thermal coal imports in the short term, imported coal will remain an important supplement to domestic supply amid continued production constraints. China’s thermal coal imports are therefore expected to remain relatively high in August.
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