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China reinforced its position as the world's largest coal consumer in the past year, widening its lead over India, the second largest buyer, to the largest margin since 2013, according to customs data. This dominance in the global coal market has played a role in moderating the decline in coal prices. Despite a drop from the record highs following Russia's invasion of Ukraine in 2022, global thermal coal prices remained 50% above the average of the years 2017 to 2019, as reported by the International Energy Agency (IEA).

In 2024, China's coal imports surged to a record 542.7 million metric tons, more than twice India's imports of 250.2 million tons. This marked a significant expansion from the previously narrowing gap observed during the four years before the pandemic when China's lead averaged 26%, as per customs and shipping data. The preference for foreign coal in China increased last year due to its lower cost compared to domestic prices. However, frequent mine inspections hindered the growth of domestic coal output.

China's thermal coal imports rose by 13% during the first 11 months of 2024. Meanwhile, imports of coking coal essential for steelmaking increased by 23%, driven by mine accidents in Shanxi, a major coal-producing region, which disrupted domestic production. The country boosted its procurement of thermal coal from Russia and Mongolia, reducing dependency on Indonesia. Market experts suggest any decline in Chinese demand could significantly impact smaller Indonesian suppliers and other marginal exporters like Colombia or South Africa.

On the other hand, India imported 250.2 million metric tons of coal, which was significantly lower than China's imports. Thermal coal imports, primarily used for power generation, declined by about 3% last year. However, coking coal imports essential for steelmaking grew by 4.7% during the same period.

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Indian coal buyers shifted their preference towards more affordable thermal coal from Indonesia and South Africa, moving away from Russian and Australian supplies. This adjustment occurred as Russian coal became less competitively priced. India’s domestic coal production remains cost-effective due to lower production costs, reducing its reliance on imports compared to China.