Surplus Coal Heading for Chinese Market

The oversupply of coal globally and continued subdued demand have pushed sellers and traders from exporting nations to bank on China, the world's largest consumer, to absorb excessive volumes.
While China and India have largely been relying on domestic production to meet their requirements, overstocking in Europe and lower-than-expected winter demand drove the continent to nearly stop coal imports in Q1 2023, S&P Global Commodity Insights reported.
As a result, global exporters have been flocking to the high consumption regions in Asia, creating more supply in the region which is already stuffed with coal from Indonesia, Australia, Russia and South Africa.
"China is in the midst of economy recovery and thermal power becomes inevitable, as it can help to recover in a faster pace. Coal still remains the primary source of energy in China which is attracting the whole world," a Singapore-based trader, who deals with the China market, said.
"Electricity demand is increasing gradually, faster than the conversion of coal to other green energy. This has resulted in continued high coal consumption in China, therefore it needs to import to balance the domestic coal price."
Following weak Asian demand for around 10 weeks now, thermal coal prices have fallen to levels not seen so far this year.