Global coal shipments jumped 14% in June as LNG squeeze deepens

Coal shipments to Japan, South Korea, and the European Union surged in June as disruptions to liquefied natural gas flows through the Strait of Hormuz continued to push major energy importers toward the dirtier fossil fuel, according to new data from shipping association BIMCO.

Coal shipments to South Korea rose 25% year-on-year in June, while Japan saw a 13% increase and the EU 15%, BIMCO reported on Wednesday. Global coal shipments jumped 14% year-on-year during the month, driven largely by a 41% spike in Chinese demand.japantimes+1

A Forced Fuel Switch

The trend marks a deepening of gas-to-coal switching that has been underway across advanced economies since late March, when conflict in the Middle East disrupted LNG transit through the Strait of Hormuz. Japan's coal-fired power generation has been consistently higher since that period, with the 30-day moving average running 17% above year-ago levels as of mid-May, according to utility data compiled by Bloomberg. Natural gas-fired output fell correspondingly, the data showed.energyconnects+1

Japan's Ministry of Economy, Trade and Industry moved in late March to suspend the 50% capacity utilization cap on less efficient coal-fired power plants for the 2026 fiscal year, a step the government estimated could offset roughly 500,000 metric tons of LNG consumption.reuters+2

South Korea has also leaned heavily into coal, with total coal imports in the January-to-May period reaching 46.8 million tons, up 19.4% from a year earlier. Russian coal exports to South Korea nearly doubled over that stretch.thecoalhub

Asia's Thermal Coal Market Runs Hot

Kpler data showed Asia's seaborne thermal coal imports were projected to reach 77.5 million tons in June, the highest level of the year and up roughly 17% from June 2025. Japan's seaborne thermal coal imports alone were expected at 7.79 million tons for the month, a 26% year-on-year jump.apbi-icma+1

Thermal coal prices have reflected the tightness. Australian high-CV 6,000 coal reached $140 per ton FOB, while South African benchmarks settled at their highest level in two-and-a-half years.thecoalhub

Outlook Hinges on Hormuz

Shell ↘ 1.99%, in its LNG Outlook 2026 released on Monday, warned that global LNG trade could remain flat this year — the first stagnation in over a decade — if Hormuz disruptions persist. The company said trade could return to growth in 2027 if shipping normalizes over the summer.shell+1

Analysts at Ember have projected that any sustained return to coal will remain modest at the global level, estimating a rise of no more than 1.8% in coal power output for 2026, with no new coal plants announced in response to the crisis. A normalization of Hormuz transit, BIMCO analysts noted, could weaken coal import demand across Japan, South Korea, and the EU.carbonbrief+1