General Administration of Customs: China’s imports of coal and lignite stood at 42.092 million tonnes in August 2026, a year‑on‑year decrease of 1.51%.

Latest data released by the General Administration of Customs shows that in August 2026, China imported 42.092 million tonnes of coal and lignite, down 636,000 tonnes or 1.49% month‑on‑month. Compared with 42.737 million tonnes in August last year, imports dropped by 645,000 tonnes, representing a year‑on‑year decline of 1.51%. Imports have posted year‑on‑year falls for two consecutive months. After a brief rebound, they slipped again for another two‑month stretch, yet the decline narrowed by 18.49 percentage points.

From January to August 2026, cumulative imports of coal and lignite reached 310.188 million tonnes, a year‑on‑year increase of 3.4%, 0.9 percentage points lower than the January‑July reading. The annualized cumulative import volume stood at 465.28 million tonnes, below last year’s level of 490.49 million tonnes.

Currently, China’s top‑five coal import sources are Indonesia, Mongolia, Russia, Australia and Canada, accounting for 40.4%, 27%, 15.4%, 13.7% and 1.8% respectively. The top‑four suppliers make up 96.5% of total coal imports, with Indonesia holding nearly half of the market share. Compared with full‑year figures of last year, the share of coal imports from Indonesia has declined, while those from Mongolia, Australia and Canada have all picked up.

I. Key Driving Factors and Logic

Month‑on‑month and year‑on‑month imports edged down moderately with a markedly narrowed decline. Despite the peak summer power demand season in July‑August, import procurement contracted, and the marginal supplementary effect of overseas coal on the domestic market weakened.

1. High downstream inventories curtail procurement activity. Ahead of the peak summer demand season, coastal power plants completed stockpiling in advance. Power plant and port inventories stayed at multi‑year highs. Even amid high‑temperature power consumption peaks, end‑users showed little willingness for active spot restocking and mainly drew down existing stocks, suppressing demand for seaborne coal arrivals.
2. Constraints from external supply and price comparisons. Indonesia raised its domestic market obligation (DMO) ratio for domestic supply and saw higher local power consumption, tightening spot coal available for export. Coupled with volatile international freight rates, price inversion between domestic and imported coal occurred in certain periods, prompting traders to scale back order volumes.
3. New‑energy substitution leads to overall subdued import performance. The economy maintains positive growth, with rising power consumption driven by data centres and AI computing capacity expansion. Nevertheless, rapidly growing installed capacity of clean energy such as photovoltaics absorbs most incremental power demand. New photovoltaic installed capacity exceeded that of thermal power in January‑July, weakening marginal demand for thermal power and reflecting the long‑term impact of energy transition.
4. Solid foundation for domestic supply security. Domestic coal under long‑term supply agreements is well implemented. Under regular safety supervision, major producing regions secure coal supplies for power generation via long‑term contracts, strengthening substitution against high‑priced imported coal.

II. Confluence of Domestic Supply Contraction and Seasonality

1. The major coal mine safety accident in Shanxi on May 22 marked a short‑term inflection point for supply‑demand balance. After the accident, intensified safety inspections and compliance controls in key producing provinces of Shanxi, Shaanxi and Inner Mongolia triggered a phased reduction in effective domestic production capacity. Tightened domestic coal supply fuelled market restocking expectations. Domestic buyers ramped up overseas orders, driving a quick rebound in coal imports and turning cumulative growth positive: the January‑June year‑on‑year reading improved from a 3.2% drop in January‑May to a 1.7% rise, and further climbed to 4.3% in January‑July. This import surge stemmed from domestic supply constraints and pre‑summer restocking.
2. Divergent demand logic across coal types

• Thermal coal: Long‑term pressure from wind and solar substitution. Import‑driven restocking only takes place when domestic supply tightens.
• Coking coal: Supported by rigid demand from the steel‑coking chain, independent of thermal‑power cycles. Sustained strong import growth makes it a rigid source of import volume increase for coal.

III. Market Impact Assessment

1. Short‑term market moves are dominated by domestic supply disruptions, while long‑term trends are shaped by energy transition. Safety incidents at end‑May generated a short‑term import spike that pushed up coal prices. As production resumes in major producing areas, supply pressures ease, and prices and imports revert to fundamental drivers. In the medium‑to‑long run, new‑energy substitution caps thermal‑coal demand, removing the basis for sharp and sustained price hikes.
2. Divergent performance among coal types will intensify. Thermal coal features “soft fundamentals plus periodic disruptions”. Coking coal stays resilient following steel‑sector cycles. Prices and import volumes of coking coal and thermal coal will keep diverging, shifting market focus from aggregate volume to supply‑demand balances for individual coal grades.
3. Changing role of importsSource: https://www.steelhome.com/detailspage.php?nid=4758575&ntype=n Imported coal has evolved from a long‑term incremental supply source into a flexible buffer against domestic supply shortfalls. Imports stay subdued when domestic supply security holds firm; imports can surge rapidly for restocking once safety or environmental controls tighten in major coal‑producing regions.

IV. Impacts on Industrial Chains

1. Thermal coal: Lower imports create upside for domestic coal prices. In early September, the price of 5,500‑kcal thermal coal at ports climbed to around RMB 980 per tonne, easing cost pressures for power plants.
2. Coking coal: Rigid domestic supply contraction leads to greater inflows of imported Australian and Mongolian coking coal.
3. Downstream steel mills: Amid tight metallurgical coke supply, cost increases pass through smoothly, likely squeezing steel‑mill profit margins further.

V. Outlook and Projections

1. Short‑term (September‑October through winter stockpiling in Q4) Summer power demand fades, bringing natural thermal‑power demand declines. Upcoming northern winter stockpiling will generate fresh seasonal rigid demand. Combined with uncertainties over safety and environmental policies in major producing regions, imports may see periodic rebounds, yet are unlikely to replicate the sharp surge seen in June‑July.
2. Medium‑term Economic expansion and higher power use for AI computing lift overall electricity consumption. Still, continuous commissioning of clean‑energy capacity puts thermal‑coal demand on a gradual long‑term downtrend. Coking‑coal import trends hinge on steel‑mill profitability and coking‑plant operating rates. Total annual coal imports will most likely fall below last year’s level.
3. Key monitoring indicators Safety supervision policies in Shanxi, Shaanxi and Inner Mongolia; wind‑solar power output; winter stockpiling procurement pace; steel‑coking operating rates; domestic‑overseas price gaps for different coal grades.

VI. Summary View

Against the peak summer power‑demand season in August, imported coal fell both year‑on‑year and month‑on‑month. High inventories and overseas‑supply constraints jointly suppressed coal arrivals. Import sources are shifting toward neighbouring suppliers: shares of Mongolian and Australian coal rose while Indonesia’s share declined. Full‑year import volume may trail last year’s figure. Overall, short‑term import volatility stems from domestic safety‑driven supply adjustments, whereas energy transition underpins the long‑term downtrend in thermal‑coal demand. Divergent performance across coal types will persist in the market.