China’s coal imports hit an eight-month high in August, customs data showed on Monday, supported by higher domestic prices, although volumes remained below the levels seen a year earlier.

The country imported 42.74 million metric tons of coal last month, the highest level since December, but still down about 7% from August 2024 levels, according to the General Administration of Customs.

“The rise in imports reflected a widened import arbitrage, as China’s domestic prices climbed after a reduction in local coal production in July and a drawdown in Bohai Rim port stocks,” said Toby Hassall, lead coal market analyst for LSEG.

China’s coal imports have slid year-on-year as buyers turned to ample and inexpensive domestic supply. However, authorities have imposed limits on production since July to support prices, pushing domestic coal output to fall to the lowest level in over a year that same month.

The supply tightening drove a price rebound through July and August, with domestic coal prices rising to a six-month high at the end of August, according to a government index.
The surge in domestic prices widened the import arbitrage, making foreign coal increasingly profitable. Prices have since eased in September as cooler weather reduced demand.

Imports are expected to remain below year-earlier levels through the second half of the year, according to a forecast from Shenhua Energy 601088, the listed arm of the country’s largest miner, in its half-yearly report.

For the first eight months, coal imports were down 12% year-on-year at 299.94 million tons, the customs data showed.
Source: Reuters