Asia's seaborne thermal coal market is shrinking very slowly: Russell

Asia accounts for nearly 90% of seaborne thermal coal trade. Participants at the CT Asia conference said the market is gradually shrinking, with supply expected to decline slightly faster than demand and prices likely to stay relatively stable, while remaining vulnerable to unexpected events.

Indonesia produced around 790 million tons of coal in 2025, and the government has instituted cuts for 2026 to limit exports and lift prices. The consensus at the conference was that output will fall by around 60 million tons; industry representatives also said they believed the government wanted to cap production at around 700 million tons a year. Domestic coal sales grew at an 11.1% compound annual rate from 2015 to 2025 and now account for 31% of Indonesian coal demand.

China and India are expected to moderate seaborne imports as domestic production recovers, while renewables and plant retirements are likely to reduce imports over time in China, Japan and South Korea. Growth from smaller buyers including Vietnam, the Philippines and Bangladesh is unlikely to offset lower demand from the four largest importers.