China imports surge 41%, driving global coal shipments higher

Trade reversed last year's decline with volumes up 3% since January.

Global coal shipments rose 14% year on year (YoY) in June, driven by a 41% increase in shipments to China, according to the Baltic and International Maritime Council (BIMCO).

Filipe Gouveia, Shipping Analysis Manager at BIMCO, said this comes as the country sought to offset weaker domestic coal supply and meet higher demand from electricity generation.

“Since the start of the year, global coal shipments have risen 3% YoY, reversing last year’s trend, when they fell 4% YoY,” Gouveia added.

China's imports accelerated from May after a mining accident in Shanxi, northern China, on 28 May led to the temporary closure of 109 mines for safety inspections.

“Some of those mines started reopening in June, but output appears to still be lagging pre-accident levels,” he said.

Coal shipments to South Korea, Japan, and the EU also rose 25%, 13%, and 15% YoY, respectively, as tighter liquefied natural gas shipments since March, caused by transit disruptions in the Strait of Hormuz, increased demand for alternative energy supplies.

"The rise in coal volumes has had a positive impact on the dry bulk market, and particularly on the Panamax segment," Gouveia said.

Coal accounted for around half of the Panamax segment's tonne-mile demand in June, contributing to a 73% YoY rise in the Platts KMAX 9 index.

BIMCO said the outlook remains mixed as China's coal production could recover, whilst El Niño may increase coal demand in India and Southeast Asia.

Conditions in the Strait of Hormuz remain a key uncertainty, he noted.