Coal Falls as Fuel Switching Demand Remains Limited

2026-05-08 06:03 By Jam Kaimo Samonte 1 min. read

Coal prices slipped toward $130 per ton and were on track to finish the week lower, as fuel switching by major Asian economies in response to the Middle East-driven energy supply shock proved less aggressive than initially expected.

Thermal coal has served as an alternative to liquefied natural gas for power generation, particularly after the effective closure of the Strait of Hormuz disrupted roughly 20% of global LNG supply. However, recent data showed that both Japan and South Korea imported less thermal coal in April compared with March, with volumes also remaining well below the five-year average, indicating that demand has stayed relatively subdued by historical standards.

Analysts also noted that the sharpest decline in LNG imports across Asia has come from China, which has reduced overseas purchases and shifted instead toward domestic coal production as well as pipeline and locally sourced natural gas, helping ease pressure on global LNG supply available to other Asian buyers.



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