FX.co ★ Coal Prices Decline on Weak China Demand Outlook

In mid-June, Newcastle coal futures dipped below $104 per tonne, marking their lowest point in nearly two weeks, primarily due to growing concerns about reduced demand in China. The industry has cautioned that China's coal imports could decrease by up to 100 million metric tons by 2025, which would represent an annual drop of 18.4%. During the initial five months of the year, China's coal imports had already decreased by 8% compared to the same timeframe in 2024. This trend highlights China's ongoing transition towards renewable energy. Even though thermal coal remains a major component of China's energy consumption, demand is waning owing to the expansion of solar, wind, and hydroelectric capacities. Moreover, India's coal imports witnessed a 4.4% year-on-year decline in April, falling to 24.95 million tons, as ample domestic reserves negated the necessity for international purchases. The simultaneous reduction in demand from Asia's two largest coal consumers continues to exert downward pressure on global coal prices.