Southeast Asia set to boost coal trade as China nears peak

NUSA DUA, Indonesia: Industry officials expect Southeast Asian countries such as Vietnam and the Philippines to increase their coal trade and consumption this decade, even as demand from largest consumer China nears its peak.

The Indonesian Coal Mining Association (ICMA) expects imports from China and India to peak in 2025, ending the growth of global maritime trade volumes of the polluting fuel, its chairman Priyadi said in a presentation at the Coaltrans Asia conference.

However, ICMA expects annual coal imports by Southeast Asian countries, including Vietnam and the Philippines, to increase by an average of almost three percent from 140.9 million tonnes in 2023 to 170.9 million tonnes in 2030.

Power generation in Vietnam, the fastest-growing economy in Southeast Asia, is seen as the most promising growth market for coal, traders and industry representatives said at the conference.

Dinh Quang Trung, deputy general manager for coal trading at state-owned coal company Vinacomin, said he expects Vietnam to import 66 million tonnes of coal by the end of this year, down from 47.8 million tonnes in 2023, according to analytics firm Kpler.

“By 2035, we will reach a peak import of 86 million tonnes of coal per year. About 70 to 75 percent of our total consumption will be for electricity,” he said.

According to Kpler data, Philippines coal imports rose 7.6 percent in the eight months to August 31, while Malaysian shipments rose 4 percent.

While Southeast Asian countries are expected to overtake China and India as key growth markets for exporters, industry officials expect consumption in the larger economies to remain high. Imports are expected to grow in the short term and remain broadly stable for the rest of the decade.

China's thermal coal imports are expected to rise 6.3 percent year-on-year to 391 million tonnes in 2024, said Feng Dongbin, deputy director general of Fenwei Digital Information Technology, which operates Chinese coal analysis platform Sxcoal.

Riya Vyas, senior analyst at Indian coal trading company I-Energy Natural Resources, expects coal imports to rise this decade. Data from Indian consultancy Bigmint shows that Indian imports rose 11 percent year-on-year at the end of August.

While Southeast Asian countries are not connecting their coal-fired power plants to the grid, they are increasing the capacity of existing plants to meet increased electricity demand, industry officials say.