According to China Coal and a report published on Monday, May 25, by the Indonesian website KONTAN.CO.ID—citing a dispatch from Reuters—the conflict involving Iran has impacted global energy markets, including the Asian thermal coal market. Although the impact is less pronounced than that on crude oil and liquefied natural gas (LNG), both the volume of coal imports in Asia and thermal coal prices have seen significant increases, reaching their highest levels in recent years.

Reuters reported on Monday that the rise in international coal prices was triggered not only by the conflict involving Iran but was also linked to other factors, such as a decline in China's domestic coal production and changes in Indonesia's coal export policies.

Data from the commodities analytics firm Kpler indicates that in May 2026, seaborne thermal coal imports into Asia are projected to reach 76.26 million tons. This figure represents a 23% increase from April and exceeds the 72.83 million tons actually imported during the same period last year (May 2025).

Import volumes are rising in almost all of Asia's major coal-importing nations.

As the world's largest coal importer, China is expected to import 22.63 million tons of thermal coal in May 2026. This volume marks a substantial increase from the 16 million tons imported in April, reaching its highest level since January.

While China's demand for coal imports is rising, its domestic coal production has declined. In April, China's coal output stood at 385.63 million tonnes—a significant drop from the record-high 440.62 million tons produced in March, and a 1% decrease compared to the same period last year. On a cumulative basis, China's coal production for the first four months of 2026 (January through April) totaled 1.58 billion tons, representing a year-on-year decline of 0.1%.

Meanwhile, China's coal-fired power generation increased by 3.6% year-on-year. This situation has further tightened the balance between domestic coal supply and demand, thereby driving up import volumes.

Last week, a coal mine accident in Shanxi province—the most severe in 17 years—claimed 82 lives; this incident is expected to exacerbate supply pressures further. The Chinese government is anticipated to step up safety inspections at coal mines in the immediate future.

China's growing demand for imports has also provided support for coal prices in Indonesia. According to Argus assessments, for the week ending May 22, the price of Indonesian coal with a calorific value of 4,200 kcal/kg reached $64.43 per ton. This price marks a three-year high—a 42% increase compared to levels recorded at the end of last year.

Meanwhile, India's imports of thermal coal are projected to reach 13.78 million tons in May 2026. This represents the highest volume since last June and a 7.3% increase over the 12.84 million tons imported in April.

Heatwaves across India have pushed electricity demand to historic highs, thereby increasing the demand for coal-fired power plants.

On the other hand, the market is also closely monitoring changes to Indonesia's coal export policies. The Indonesian government plans to have a state-owned enterprise take over the management of foreign coal trade in an effort to control contract terms and export prices.

The government has stated that it will continue to honor existing long-term contracts, but reserves the right to review contract pricing in the future. This policy aims to curb the practice of under-invoicing and boost government revenue.

However, uncertainty surrounding the implementation of these new regulations could disrupt global coal trade flows in the short term.

In May, Japan's thermal coal imports are projected to reach 7.59 million tons—a 14.5% increase from the 6.63 million tons imported in April.

Concurrently, South Korea's thermal coal imports are expected to hit 6.73 million tons—the highest level since January—marking a 40.5% surge from the 4.79 million tons imported in April.

Due to rising LNG prices—driven by the conflict in Iran—both nations are expected to increase their reliance on coal-fired power plants as an alternative energy source.

This situation has also driven up the price of high-quality Australian thermal coal. For the week ending May 22, Newcastle coal prices rose to $133.09 per ton, nearing the 18-month high of $140.53 per ton recorded in early April.

As the world's second-largest coal exporter, Australia stands to benefit from the changes in Indonesia's export policies that are disrupting global supply—particularly given that Australia's lower-calorific-value thermal coal can serve as a substitute for Indonesian coal.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.