Global Seaborne Coal Reaches 116.5 Million Tons in July 2026, Thermal Coal Declines While Metallurgical Coal Rises

en.Wedoany.com Reported - Global seaborne coal flows in July 2026 edged up 1.0% year-on-year to a total of 116.5 million tons, yet the structural shifts behind the headline figure are pronounced: thermal coal and metallurgical coal diverged significantly, with demand for the former contracting while the latter surged on the back of Asian buyers.

By coal type, global seaborne thermal coal flows fell 2.3% to 87.3 million tons in July, while metallurgical coal rose 11.8% to 27.2 million tons. On the thermal coal front, Asian demand remained resilient, with the four major importers—China, India, Japan, and South Korea—collectively up 18.3% year-on-year for the month. China continued to rank as the largest thermal coal destination with a 32% market share. These regions are in their summer peak electricity demand season, where household and industrial cooling needs are elevated, and coal remains a key source for stabilizing their power grids.

The drag on global seaborne thermal coal volumes came primarily from Europe and the United States. These two regions have, on the one hand, increased the share of renewable energy in their power mixes, and on the other, favored drawing down domestic coal inventories over boosting imports.

On the metallurgical coal side, India remained the largest destination, though its market share dipped slightly below 20% in July, with import volumes down 18% year-on-year; Japan and China grew by 24% and 30%, respectively, driving the overall uptick. The reasons behind the growth in the two countries differ: Japan's steel industry may be showing early signs of recovery, while China aims to compensate for supply shortfalls in domestic coal mining.

Looking ahead to August, Signal Ocean data indicates that metallurgical coal flows typically rise month-on-month during this period, as many steel mills activate their third-quarter procurement budgets. Given that current metallurgical coal flows are already nearly 6% higher than the same period last year, August 2026 flows are expected to exceed year-ago levels, despite World Steel Association (WSA) data showing global steel production currently 0.7% lower than a year earlier.

The thermal coal outlook is likewise underpinned by weather factors. China, Japan, and South Korea are experiencing heatwaves, driving up cooling-related electricity demand; India, meanwhile, has seen a sharp decline in hydropower generation due to heat and drought, making it more reliant on coal-fired power. This situation is unlikely to reverse in the near term.

For the shipping market, ton-mile demand for coal-carrying vessels is likely to remain above 2025 levels and could exceed the 2023 peak for the first time this year.

Although total seaborne coal volumes are only growing modestly, the divergence between thermal and metallurgical coal is having an increasingly visible impact on commodity and freight markets. Thermal coal demand is supported by weather-driven power generation needs in Asia, while Europe and the United States continue their structural decline; on the metallurgical coal side, stronger imports from China and Japan have offset weak Indian demand, reflecting shifting regional dynamics rather than a broad-based steel market recovery. Seasonal procurement by steel mills, sustained summer electricity demand, and tightening domestic coal supplies in key markets are expected to continue supporting seaborne trade. This should provide favorable conditions for freight demand for Panamax and Capesize vessels for the remainder of the quarter.