As of July 28, 2026, Asia-Pacific thermal coal spot prices continued their downward channel since the start of the year. The benchmark price for 6,000 kcal/kg thermal coal at Newcastle, Australia, fell to $85/ton, the lowest since October 2023. Compared to the same period in 2024, the decline exceeded 35%. Meanwhile, the price for 5,500 kcal/kg coal from Kalimantan, Indonesia, has also fallen below $70/ton, with strong bearish sentiment in the market.
Supply: Major coal-producing countries continue to increase output
According to the latest data from Indonesia's Ministry of Energy and Mineral Resources, Indonesia's coal production in the first half of 2026 reached 420 million tons, up 8% year-on-year, and the full-year target of 850 million tons is expected to be exceeded. In Australia, with the end of La Niña, mines in Queensland and New South Wales resumed full production, with exports up 12% year-on-year from January to June. After Mongolia improved its railway transport capacity to China, monthly coal exports to China have stabilized at over 8 million tons. The oversupply situation has further intensified.
Demand: Imports decline in both China and India
Data from China's General Administration of Customs on July 25 showed that China imported 39.5 million tons of coal in June, down 7% month-on-month and 15% year-on-year. Despite the summer peak electricity demand, strong hydropower (Yangtze River basin water inflow 20% above normal) and a 38% year-on-year increase in new wind and solar capacity effectively relieved pressure on coal-fired power. In India, as of mid-July, domestic coal inventories had risen to 45 million tons, far exceeding the warning level of 25 million tons. India's Ministry of Power has postponed the 10 million ton import tender originally planned for August.
Alternative energy impact: Renewable energy share hits record
According to Asia-Pacific Clean Energy Tracking (APCET) data, the share of renewable energy in power generation in the Asia-Pacific region exceeded 42% in Q2 2026, with China at 45% and India at 32%. Solar PV installations in Southeast Asian countries such as Vietnam and the Philippines grew rapidly. In June, Vietnam's midday solar output accounted for up to 28% of electricity demand, directly suppressing coal-fired power output. Bangladesh saw its coal purchases drop 22% year-on-year as LNG spot prices fell and gas-fired power load increased.
Outlook: Price bottom not yet clear
According to the head of Asia-Pacific coal market at S&P Global, the current spot coal market faces a "three lows" dilemma: low demand, low freight rates, and low alternative energy costs. Indonesia's HBA index has been below $82/ton for three consecutive months, and some small miners are facing losses. However, large miners can still maintain positive cash flow through long-term contracts and low production costs. In the short term, if China's high temperatures persist in August, there may be phased procurement, but overall in a loose supply-demand environment, coal prices are expected to fluctuate in the range of $75-90/ton.
Looking further ahead, Asia-Pacific countries are accelerating their carbon neutrality targets. Japan plans to shut down three more old coal-fired power plants by the end of 2026, and South Korea's Carbon Border Adjustment Mechanism (KCBR) is being gradually rolled out. The coal trade pattern faces structural adjustments. Investors should closely monitor the energy policy direction after China's Third Plenary Session and the impact of the Indian monsoon on hydropower.
