Southeast Asia is increasingly influential in the global coal market, driven by China’s demand nearing its peak. Countries like Vietnam and the Philippines are expected to boost their coal imports significantly in the coming years.
According to the Indonesian Coal Miners Association (ICMA), imports from China and India might hit their highest levels by 2025, marking a shift in the global market dynamics. Southeast Asia is becoming a vital market for coal exporters, with imports in the region projected to grow at an average annual rate of nearly 3%. By 2030, coal imports in Southeast Asia are expected to reach 170.9 million metric tons, up from 140.9 million tons in 2023. Vietnam, in particular, is experiencing a surge in coal demand due to its rising electricity needs.
Vietnam and the Philippines: Emerging Coal Markets
In Vietnam, state-owned Vinacomin plans to import 66 million tons of coal by the end of this year, up from 47.8 million tons in 2023. The company projects a peak in imports of 86 million tons annually by 2035, primarily for powering its power plants. Similarly, the Philippines has seen a 7.6% increase in coal imports in the first eight months of 2024.
Despite this increase in coal consumption, it does not necessarily translate into a rise in coal-fired power plant capacity. Instead, countries like Malaysia and Indonesia are focusing on optimizing their existing infrastructure to meet electricity needs. In Malaysia, data centers and other industrial sectors are significant drivers of coal consumption.
China and India: Sustained High Consumption
While Southeast Asian markets are growing, China and India remain major consumers of coal. China’s thermal coal imports are expected to rise by 6.3% in 2024, reaching 391 million tons, according to Fenwei Digital Information Technology. India’s coal import growth forecasts are also strong, driven by persistent energy demands.
The coal market in Asia is at a pivotal point, with emerging players gaining importance while the largest consumers stabilize their demand. This presents opportunities for exporters to adjust their strategies toward new growth markets while continuing to supply China and India.
Future Outlook for Coal Exporters
Southeast Asia’s interest in coal remains strong, mainly due to its affordability and reliability as an energy source. In Indonesia, the developing power plant infrastructure indicates stable long-term demand. Additionally, coal consumption is supported by nickel processing plants that supply the electric vehicle industry.
Low integration of renewable energy in Malaysia, the Philippines, and Indonesia suggests that coal will continue to be a key part of their energy mix. International talks on financing the energy transition, including phasing out coal-fired power plants, have yet to produce significant results, slowing the shift to alternative energy sources.