China, India Shift To Higher-Grade Coal, Cut Indonesian Imports

Top thermal coal importers China and India are slashing imports of Indonesian coal in favor of more energy-dense grades from other countries, as a global price drop has made higher-quality coal more competitive, Sudarshan Varadhan and Sam Li reported for Reuters.

Mongolian coal in China and South African coal in India have been the biggest beneficiaries of this shift. I Photo: Shubert Ciencia Wiki

Coal purchases by China and India from Indonesia—the world’s largest exporter—are falling faster than their overall thermal coal imports, as both countries shift toward higher-calorific value (CV) coal that yields more energy per ton, according to industry officials.

“Higher CV coal is more expensive but produces more energy for every dollar spent at current prices. One million tons of higher CV coal can replace 1.2–1.3 million tons, or even 1.5 million tons, from Indonesia,” said Vasudev Pamnani, director at India-based coal trader I-Energy Natural Resources.

In China, Indonesian medium- and low-calorific thermal coal has been struggling to compete with discounted Russian supplies of similar grades, said Kpler analyst Zhiyuan Li.

Ramli Ahmad, president director of Indonesian miner Ombilin Energi, said Indonesian coal could regain competitiveness if higher-grade prices rise due to the Middle East conflict—but lower-CV coal will continue to struggle as long as energy-dense alternatives remain affordable.

Mongolian coal in China and South African coal in India have been the biggest beneficiaries of this shift, reaching record market shares in the first five months of 2025, according to Chinese customs and Indian trade data.