Coal Prices Collapse 8% as Oil Slump Clashes with China's Demand Shift

Jakarta — Coal prices collapsed following a sharp decline in crude oil prices.

According to Refinitiv data, coal prices closed at US$131.1 per tonne, falling 8.8% in Tuesday trading (10 March 2026). This decline reversed coal’s rally, which had gained 8.2% over the previous three consecutive days.

Coal prices tumbled as global oil prices crashed. Oil prices fell 11% on Tuesday after US President Donald Trump stated that the war would end. Coal serves as a substitute for oil, and their prices are mutually influenced.

Coal prices remained depressed despite positive news from China. China’s coal imports in January-February 2026 reached record highs for that period in history. This outcome contradicted earlier expectations that imports would decline owing to abundant domestic supplies.

The two-month import data is typically combined due to the Lunar New Year holidays, which can disrupt trading activity in one of the months.

Several factors sustained strong imports despite large domestic production: price arbitrage remains available for certain types of imported coal, keeping Chinese buyers interested. Additionally, demand from power plants and industry remained stable in the year’s opening, and long-term contracts with previously scheduled deliveries continued arriving at Chinese ports in early 2026.

This import surge occurred amid high domestic coal production and substantial stockpiles. Many analysts previously predicted imports would weaken as Chinese domestic prices began declining and utilities shifted to local supplies.

Whilst early-year figures set records, some analysts expect import growth may slow in coming months, given high port stockpiles, more competitive domestic prices, and narrowing import margins.

China is the world’s largest coal importer, so minor demand shifts can immediately affect the global coal market and exporting nations such as Indonesia, Australia, Russia, and Mongolia.

Despite rising imports, China’s domestic thermal coal market is expected to experience gradual demand transition from imported to domestic coal, particularly from several coastal power plants. This shift occurs because the price gap between imported and domestic coal has reached its highest level in approximately four years, making imported coal less competitive.

Thermal coal prices in the major mining region of Shaanxi (Yulin) on 10 March fell slightly by CNY 2 per tonne to CNY 598 per tonne, indicating mild pressure on China’s domestic coal market.

Coastal power utilities in China are beginning to switch to domestic coal owing to the price difference between imported and domestic coal reaching approximately four-year highs. This widened price gap renders imported coal uncompetitive, prompting power plants to prefer purchasing supplies from domestic mines.

Seaborne coal import demand into China may weaken, particularly from coastal utilities, which are typically the largest buyers.

This could pressure Asia’s coal export market, including suppliers such as Indonesia and Australia.

This transition also demonstrates that China’s reliance on domestic production strengthens when local prices become more competitive. Because imported coal has become substantially more expensive than domestic coal, Chinese power utilities are reducing import purchases and switching to local supplies. This situation could dampen demand in the international coal market.

When the price spread between imported and domestic coal widens, power plants tend to reduce seaborne coal purchases. This may suppress China’s import demand, particularly from major suppliers such as Indonesia and Australia.

If this trend continues, the international coal market could face price pressure, given that China is the world’s largest buyer.