Defying Bad News from China, Coal Prices Soar Instead

Jakarta, CNBC Indonesia - Coal prices have risen again amid escalating oil prices. According to Refinitiv, the June coal contract closed at US$136.4 per tonne, up 1.4% in trading on Monday (12/5/2026). This increase is good news following a 0.55% weakening last Friday. Oil futures contracts rose after that development. US West Texas Intermediate crude surged 2.78% to close at US$98.07 per barrel, while Brent crude rose 2.88% to US$104.20 per barrel. Coal is a substitute commodity for oil, so their prices influence each other. Coal prices continue to surge despite bad news from China. China’s coal imports fell in April after recording a record in the first quarter, which had previously surprised the market by not following expectations of a slowdown. This decline was due to weak demand and the uneconomical nature of imports. Total coal imports in April 2026 reached 33.08 million tonnes, down 12.54% from the previous year and 15.3% lower than March, according to data from the General Administration of Customs of China cited by SX Coal. This decline was triggered by a combination of high seaborne coal prices, reduced export supplies, strong domestic production, and seasonally increasing clean energy generation. Imported coal prices are also more expensive than domestic coal. Rising global energy costs, higher freight expenses, and supply limitations make import prices far more costly than the relatively stable domestic market in China. On the supply side, China’s two main suppliers have also weakened. Indonesia, the largest supplier of thermal coal, faces domestic policy restrictions that pressure exports. Meanwhile, Russia’s seaborne coal exports fell 10.34% year-on-year, with shipments to China plummeting 33.59% from last year. Domestically, high stocks and weak demand have reduced the need for imports. China’s focus on energy self-sufficiency and long-term contracts keep power plant coal reserves high. Seasonally weakening electricity demand and rising renewable energy production are also pressuring coal consumption. April is a transitional period between winter and summer, so energy needs tend to be lower, while hydroelectric production increases, reducing the share of coal-fired generation. Looking ahead, instability in the Middle East still has the potential to disrupt global energy supplies, while high oil prices could affect production and logistics costs in diesel-based exporting countries like Australia and Indonesia. On the other hand, demand from Japan, South Korea, and Europe is increasing due to seasonal stock replenishment and a shift from gas to coal in some countries, heightening competition for high-quality coal. In this situation, coal import prices in China are expected to remain strong. Imports are likely to continue declining year-on-year in May, although restocking demand ahead of summer and increased Mongolian coal supplies could slightly boost volumes compared to April.