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COMMODITY RADAR | Spotlight: COAL
Coal continues to lose power in the China-bound capesize market
China’s import of thermal coal so far this year trails the same period in 2024 by over 14%, weighing on global capesize demand.
Chinese seaborne thermal coal demand weakened in 2025 due to two key factors:
Stronger domestic coal production, up 1.5% y/y in the first 10 months of 2025.
Rapid expansion of renewable energy infrastructure, displacing thermal power generation.
China has imported 52mt less coal so far in 2025 as a result.
Global thermal coal tonne-miles have fallen below 2024 levels, with shipments to China also below both 2024 and 2023.
This downtrend is expected to continue as China increases its reliance on renewable energy.
Source: Coal carrying Capesize tonne-miles to China from Signal Ocean
China has imported less thermal coal each month, year-over-year, since the start of 2025. The results of which have seen Chinese thermal coal imports down by around 52mt YTD.
China is the destination for approximately 30% of all thermal coal shipments, and thermal coal makes up around 13% of the total demand for capesize vessels. Given the weaker demand from China for thermal coal, capes carrying thermal coal have seen much weaker tonne-days and tonne-miles performances so far in 2025.
This also weighed on total cape demand, which has seen tonne-miles and tonnes-days below that of 2024 for much of the year. In recent weeks, performance has improved to above 2024 levels, but this is a result of 2025 not following the seasonal weaker start to Q4 seen in previous years.
Source: China thermal coal imports from Signal Ocean
Thermal coal drives Chinese electricity generation, yet the importance of coal has waned as the country has rapidly expanded non-fossil fuel electricity generation. Reports state that China used coal for around 70% of electricity generation in the mid-2000’s but this fell to around 60% in 2023, the latest official number.
The latest figure for China’s electricity generation from thermal sources as a percentage of total electricity generation is 64% in October 2025. This is a slight reduction from the figure in October 2024, which was 65%. However, in terms of thermal energy actually produced, October 2025 saw an 8% increase in kWh compared to October 2024, meaning more coal was likely burned.
Balancing out this need for more coal has been Chinese domestic coal production. The latest figures from the National Bureau of Statistics for China show coal production in 2025 is currently running 3.4% higher than last year. This figure is heavily weighted on the first half of 2025 H1, which ran 6.8% above the previous year, with the second half of 2025 so far running 1.5% lower than 2024.
Typically, Chinese coal demand increases in the final quarter of the year. This is unsurprising due to the extra power demand needed for heating in the cooler months of the year. Given that domestic coal production has started to slow and continues to lose some of the gains it had over production in 2024, China may start to import more coal to keep consistent stock levels over winter.
Source: China coal production from the National Bureau of Statistics
Weaker coal production through the final quarter of 2025, at a time when demand is expected to rise, will draw down domestic stocks of thermal coal. Therefore, if Chinese coal stocks are to be replenished over the next month, we would expect greater coal imports into China. This will likely come from Indonesia, given that 64% of all Chinese coal imports have originated from Indonesia since 2022.
Beyond the end of the year, the first couple of months of 2026 are expected to be relatively strong periods of coal demand, given the season. As a result, we can expect consistent import volumes of coal, giving support to Panamax vessel demand from Indonesia. There would be downward pressure on demand if the winter in China is mild, but given the stock drawdown, it is likely that buyers will continue to import coal regardless to rebuild stocks.
Source: Origin areas of China’s coal imports from Signal Ocean
Coal imports will keep falling, but by how much…
The performance of coal imports into China will continue to depend on domestic coal production and the demand for coal in the energy mix. As renewable infrastructure builds out in China, thermal power will lose its share.
This will weigh on the demand for China-bound capesize vessels, extending the trends already seen through the end of 2024 and 2025. Yet, Indonesia will remain a key coal trade partner for China, with smaller shipments, primarily panamax-sized, going forward.
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Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
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Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
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