China boosts coal exports amid domestic glut, shrinking imports

China is ramping up coal exports in response to a domestic supply glut, with outbound shipments rising 13 per cent in the first five months of 2025 compared to a year earlier, Reuters reported. The world’s largest coal producer exported around 2.5 million tonnes during the period, according to customs data, with key buyers including Asian countries like Japan, South Korea, and Indonesia, and even some deliveries reaching as far as the Netherlands. While modest in scale compared to China’s nearly 5 billion tonnes of annual output, the uptick in exports is notable as it comes during a season when domestic demand typically surges.

The move underscores China’s growing struggle to balance its local production with consumption, as cooling industrial demand, rising use of renewable energy, and weak prices continue to weigh on the country’s coal market.

Imports fall as domestic stockpiles grow

China’s coal imports, once a major pressure valve for power generators and industry, have dropped sharply. Official data shows that imports fell 8 per cent year-on-year through May, and industry officials expect total imports to decline by as much as 100 million tonnes in 2025, which is equivalent to an 18 per cent annual drop. The country had imported a record 542.7 million tonnes in 2024.

The reversal comes as the government mandates to stockpile domestically mined fuel and reduce reliance on international supplies. Domestic coal output is expected to increase by 70-80 million tonnes this year, after a decline in 2024. Meanwhile, prices have slumped to four-year lows, pressuring smaller miners and forcing them to consider output cuts.

Indonesia, China’s largest coal supplier, saw shipments fall 26 per cent in May, while Australian exports, favoured for their higher quality, saw a slight increase.

Summer demand may offer temporary relief

With scorching summer temperatures boosting air conditioning use, analysts expect a seasonal uptick in coal consumption in China, which could offer temporary relief to oversupplied markets. Still, longer-term trends point to a gradual decline in coal's dominance.

Data from energy think tank Ember shows wind and solar energy accounted for 39 per cent of China’s total power generation in Q1 2025, which is the highest ever for the nation. While coal remains the backbone of the country’s energy system, especially for baseload generation, its share in the energy mix continues to fall, currently hovering just above 50 per cent, down from 80 per cent a decade ago.