China’s appetite for imported coal rebounded sharply in September, reaching a nine-month high as domestic price increases made foreign supplies increasingly attractive to the world’s largest coal consumer, according to customs data released on Monday.
The General Administration of Customs reported that China imported 46 million metric tons of coal last month, marking a significant uptick from recent months. However, the figure still trails the previous September’s record of 47.59 million tons—a benchmark that was subsequently eclipsed in November, making September 2024 the second-highest import month on record.
The resurgence in imports comes as domestic coal prices have climbed steadily through the second half of the year, creating a widening price differential that has made international coal supplies more economically viable for Chinese buyers.
“The rapid rebound in domestic prices in the second half of the year has further widened the price gap between domestic and imported coal, making imported coal more competitive,” explained Feng Dongbin, vice general manager at consultancy Fenwei Digital Information Technology. “This price advantage is the main driving force behind the swift recovery in import volumes.”
Several factors have contributed to tightening domestic supply and the subsequent price increases. Notably, Inner Mongolia—China’s largest coal-producing region—ordered 15 mines to cease operations after they exceeded their allocated production quotas, reducing available domestic supply just as demand remained robust.
The supply squeeze came on the heels of extraordinary power demand during what meteorologists recorded as China’s hottest summer since systematic temperature tracking began. August thermal power generation, predominantly fueled by coal, reached its highest level since at least 1998, placing additional strain on domestic coal resources.
Despite September’s monthly uptick, China’s overall coal import picture for 2024 remains subdued compared to the previous year. Customs data revealed that cumulative imports for the first nine months of the year totaled 345.89 million tons—an 11% decline from the same period in 2023.
Last year’s elevated import levels were largely driven by a collapse in international coal prices, which made foreign supplies particularly attractive. However, as global prices have stabilized and domestic constraints have emerged, the import dynamics have shifted considerably.
The September data underscores the delicate balance China faces in managing its energy security while navigating fluctuating domestic production capabilities and international market conditions.
As the nation continues to rely heavily on coal for power generation despite climate commitments, import volumes will likely remain sensitive to price differentials and domestic supply management policies in the months ahead.
WHAT YOU SHOULD KNOW
China’s coal imports jumped to a nine-month high in September, driven primarily by rising domestic coal prices that made foreign supplies more competitive. While imports increased month-over-month, they remain 11% below last year’s levels for the January-September period.
The domestic price surge stems from tightened supply—including forced mine closures in Inner Mongolia—and record summer electricity demand. Bottom line: price differentials between domestic and imported coal, not overall demand growth, are currently dictating China’s import patterns.
