China's Coal Imports Fall 6% as Prices Hit Nearly 3-Year High

China's coal imports decreased by 6% in September compared to the previous year, according to customs data released on Wednesday. This decline is attributed to robust domestic inventories, restricted supply from Indonesia, and rising import prices. In September, China imported 43.37 million tons of coal, a 3% increase from August but a 5.7% decrease from the same period the prior year, as per preliminary data from the General Administration of Customs.

The average price for China's coal imports reached its highest level since 2024 in September, according to analysts at Mysteel Global. The surge in prices is due to reduced domestic coal production and decreased imports from the top coal exporter, Indonesia. China's reliance on coal for nearly 50% of its power generation has led to a 24% increase in coal prices since mid-July, driven by tight supply and high demand.

The sharp rise in coal prices began late spring following a deadly mining accident in May, which prompted authorities to increase safety inspections and halt operations in several mines in Shanxi, a major coal-producing region. Chinese coal output has been declining year-on-year, while Indonesia's thermal coal exports have been limited by government quotas and policy uncertainties in the coal mining and exporting sectors.

In response to falling domestic production and imports from Indonesia, China's government urged local miners to maintain stable production rates after a recent jump in spot prices for thermal coal. Chinese authorities are striving to increase coal production ahead of the winter season, when coal will be crucial in maintaining power generation stability.