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COMMODITY RADAR | Spotlight: COAL
Seaborne coal suffers in 2025 as China burns less and produces more
Global seaborne coal flows suffered in 2025 due to significantly lower imports from China. This is a trend we expect to continue.
Global seaborne coal flows fall over 3% in 2025
China imported over 11% less seaborne coal in 2025. Driving the global decrease as World Ex. China saw flows flat y/y.
China’s decrease was a result of greater domestic production and less demand from thermal power generation.
This downtrend is expected to continue as China shifts its focus towards greater renewable energy. Coal will provide energy security if renewable miss required generation levels
Source: Coal carrying Capesize tonne-miles to China from Signal Ocean
China ended 2025 having imported 404mt of seaborne coal according to TSOP. This was a decrease of over 11%, or 50mt. This came despite a surge in December imports, which were 12% higher than the same month in 2024. This drove the 3% decline in global seaborne coal flows in 2025, which TSOP recorded at 1.4bt.
In 2024, China received approximately 31% of all coal flows on TSOP. This softened slightly to 29% in 2025, indicating that China cut back in a somewhat greater proportion than other regions. This slight shift in proportionality indicates a sense that China will continue to soften its dominance of the seaborne coal market. However, it will need to slip a lot further for both India and Japan to catch up.
Coal carrying capesize tonne-days spent the entirety of 2025, bar a very short period in late November, below the previous year, and this decline has continued into 2026 so far. Given that coal is one part of the trio, including iron ore and bauxite, that moves the capesize market, a weak coal outlook could weigh on capesize demand over the course of 2026.
Source: China thermal coal imports from Signal Ocean
Thermal coal remains the dominant source of electricity generation in China and usually moves in line with overall electricity output. However, 2025 was an exception. Although thermal power continued to account for the largest share of electricity generation, total electricity production in China rose by 2.2%. In comparison, thermal power generation fell by 1%, the first annual decline in over a decade.
Meanwhile, renewable energy sources experienced significant growth, with solar generation surging more than 24% y/y. China has been investing heavily in its renewable sector, spending over $624b in 2024 alone. Looking ahead, the country’s 15th Five-Year Plan envisions expanding renewable generation capacity, including high-profile projects such as a 1 GW offshore floating solar installation expected to come fully online in 2026.
Given the expected rise in China’s total electricity demand in 2026, coal will have some support as a backup to provide the necessary fuel for electricity generation if renewables fail to meet requirements. This is likely to be a ‘safety-net’ rather than an indication that greater coal use is inevitable.
Source: China coal production from the National Bureau of Statistics
Coal imports will keep falling, but by how much…
For the capesize market, coal has shifted from a growth driver to a volatility amplifier. China’s structurally lower seaborne imports, rising domestic supply, and accelerating renewables point to subdued coal-related tonne-days through 2026. While coal will retain a role as a back-up fuel during periods of renewable shortfall or weather stress, this is unlikely to translate into sustained capesize demand growth.
Instead, coal flows may increasingly be episodic, driven by short-term security needs rather than structural consumption. As a result, capesize fundamentals will lean more heavily on iron ore and bauxite, with coal offering only intermittent support.
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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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