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.



News Stream
Coal Falls as Fuel Switching Demand Remains Limited
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.
2026-05-08
Energy Security Demand Supports Coal Prices
Coal prices held above $130 per ton, below the 17-month high of $146.5 reached on March 20, but still up nearly 15% since the war began in late February. The move reflects spillover from higher oil and LNG risk premiums as failed US-Iran peace talks keep key shipping routes uncertain. Asia is leaning on coal for baseload power, with Japan extending coal plant use and South Korea easing curbs, while China boosts domestic coal output and advances coal-to-gas projects to cut import risk. The shift underscores a broader energy-security pivot as gas and oil supply fears persist. Still, any rebound in Middle Eastern energy flows could unwind recent gains, while long-term demand faces pressure from accelerating renewable energy growth and policy transitions worldwide. In corporate news, Anglo American is attracting at least three bidders for its Australian steelmaking coal assets, with Stanmore Resources, Mitsubishi Corporation and PT Buma Internasional Grup among suitors.
2026-04-27
Coal Falls to Over 7-Week Low
Coal prices slipped below $130 per ton, easing from the 17-month high of $146.5 reached on March 20 to the lowest level in over seven weeks, as renewed hopes for US-Iran talks raised expectations that energy flows through the Strait of Hormuz could resume. Traders continue to monitor diplomatic signals closely, with the key shipping route still largely shut but seen as critical to restoring supply. The potential easing of gas disruptions could reduce the need for gas-to-coal switching in power generation. Still, the prolonged Middle East conflict continues to embed a risk premium across energy markets, having driven utilities in Asia and Europe to rely more heavily on coal. Despite the recent pullback, coal prices remain up nearly 9% since the war began in early March.
2026-04-24