Asia, Europe Boost Coal Imports as LNG Price Gap Widens
Australian thermal coal trades at an 80% discount to liquefied natural gas (LNG), driving Asian and European buyers to increase purchases for November delivery.
Price Discrepancy Drives Demand
Coal is trading at a significant discount to liquefied natural gas (LNG), prompting increased imports by buyers across Asia and Europe. Australian thermal coal for November delivery in Asia is 80% cheaper than LNG, according to GNews Asia energy commodities.
This translates to Australian benchmark coal at $5.40 per million British thermal units (mmBtu), while LNG trades at $26 per mmBtu, GNews Asia energy commodities reported. Europe's November natural gas benchmark contract also stands high at over 81 euros per megawatt-hour (MWh), GNews Asia energy commodities noted, further widening the gap.
Rising Imports Across Continents
The International Energy Agency (IEA) projected in September 2026 that global coal demand would reach an all-time high this year, driven by affordability. Asian nations are leading this surge; Japan, South Korea, and China collectively imported 122 million tons of coal during the third quarter of 2026, Kpler data cited by Reuters' Gavin Maguire showed.
This compares to 143 million tons per quarter for these three countries in both the final quarters of 2024 and 2025. Europe also saw a strong increase, with June 2026 coal imports rising 43% year-on-year, GNews Asia energy commodities reported.
LNG Supply Constraints Fuel Shift
Restricted liquefied natural gas (LNG) supplies from the Middle East are contributing to elevated prices. Flows from the Persian Gulf remain over 75% lower than levels recorded before 28 February 2026, GNews Asia energy commodities stated. Shipping data compiled by Reuters in early October 2026 indicated that 21 LNG cargoes exited the Strait of Hormuz in September 2026.
While this marked the highest monthly total since the Iran conflict began, it is still down from over 60 pre-conflict. QatarEnergy's extended force majeure and frequent tanker attacks in the waterway are cited as primary causes for the reduced flows.
Indonesia, the world's largest coal exporter, has seen its August 2026 exports drop by 23% following new production quotas and policy adjustments, GNews Asia energy commodities reported. The IEA anticipates Indonesia's coal production will fall by over 12 million tons this year.
Davenport Energy managing partner Toby Copson told Reuters in early October 2026 that Asian demand remains price-sensitive, with Chinese buyers unlikely to pursue spot LNG cargoes unless prices decrease significantly. This ongoing price sensitivity means Asian economies will likely maintain higher coal import levels through winter 2026, impacting regional energy mix strategies.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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