Seaborne coal shipments to China dropped by 10% in 2025. This decline was mainly due to a rise in domestic coal supply and lower demand from steel production and electricity generation. According to a new report from BIMCO, these factors have reduced the world's largest coal importer’s need for coal.
The decrease particularly affected shipments from Indonesia, the United States, Australia, and Colombia, leading to a 21% drop in tonne miles for coal headed to China. This was exacerbated by shorter sailing distances, as shipments from the US and Colombia saw dramatic falls of 70% and 80%, respectively. These countries struggled to compete with Asian suppliers on price and faced increased tariffs on US coal.
“The drop in coal shipments to China impacted the dry bulk market negatively, with tonne miles for coal heading to China decreasing by 21%. On top of lower cargo volumes, average sailing distances were shortened as shipments from the US and Colombia fell 70% and 80% respectively. These shipments encountered tough price competition from Asian suppliers, and rising tariffs on US coal further discouraged purchases,” explained Filipe Gouveia, Shipping Analysis Manager at BIMCO.
China makes up 28% of global seaborne coal shipments, which account for 4% of dry bulk tonne mile demand. Of the coal shipped to China, 87% is thermal coal used for generating electricity, while coking coal for steel production represents the remaining 13%.
The capesize and supramax segments were most affected, with coal tonne mile demand dropping by 44% and 19%, respectively. Capesize vessels were particularly impacted by the fall in Colombian coal shipments, while panamax coal volumes saw only a 1% decline. However, tonne miles still decreased by 8% due to fewer shipments from the US.
Looking ahead, coal shipments to China face tough challenges. The International Energy Agency (IEA) predicts that China's coal demand will decrease by 1% between 2025 and 2027, affecting both thermal and coking coal. Additionally, the IEA estimates that China’s renewable energy capacity will nearly triple from 2025 to 2030, potentially meeting or exceeding the country’s increasing electricity needs.
Moreover, the World Steel Association forecasts a 1% decline in Chinese steel demand in 2026, as the Chinese government intends to cut down steel production to tackle overcapacity in the sector. Total Chinese coal supply is expected to fall faster than demand due to oversupply in 2025, which has pressured prices and increased inventories. The IEA projects a 4% reduction in Chinese coal production between 2025 and 2027, marking the first decline since 2016.
“The IEA estimates that total Chinese coal imports will drop by 8%, despite steady overland imports of Mongolian coal. This suggests a 10% decrease in seaborne coal shipments to China in 2027 compared to 2025. The severity of this decline will depend on how much the Chinese government regulates domestic mining,” said Gouveia.
In 2025, 90% of seaborne shipments to China came from Indonesia, Australia, and Russia, with Indonesia mainly supplying thermal coal, while Australia and Russia provided both thermal and coking coal. China also receives large volumes of coal overland from Mongolia and Russia.