BIMCO Shipping Analyst Manager Filipe Gouveia stated that in April 2026, imports of coal surged 27% year-on-year as Japan, South Korea, and the European Union sought alternatives to natural gas to meet electricity demand. Disruptions to traffic through the Strait of Hormuz cut off LNG exports from the Persian Gulf, leading to an 8% year-on-year decline in global seaborne LNG in April.
Due to seasonal factors from reduced heating demand, power generation in Japan and South Korea typically decreases in April and May, and coal shipments to Japan, South Korea, and the EU also decline accordingly. However, this April, even as heating demand fell, coal shipments still increased by 1% month-on-month.
Although the importance of these regions in coal trade is gradually declining as decarbonization reduces their reliance on coal, they still account for approximately 25% of global coal volumes and 31% of global ton-mile demand. Meanwhile, coal shipments to India and China have increased.
Gouveia noted that increased coal shipments to the EU, Japan, and South Korea drove an 8% year-on-year rise in global coal ton-mile demand in April 2026. Although voyages to these countries are 7% shorter than the global dry bulk average shipping distance, they are still 23% longer than the global average coal shipping distance. The increase in vessel demand supported freight rates, with Panamax and Capesize vessels benefiting particularly.
Panamax vessels are the primary workhorses for transporting coal to these three major markets, accounting for 58% of volumes, while Capesize vessels handle another 31%. Supramax vessels account for only 7% of volumes, 13 percentage points lower than the global average, mainly due to relatively fewer cargoes from Indonesia, which typically rely on such smaller bulk carriers. In terms of supply structure, 46% of coal shipped to Japan, South Korea, and the EU comes from Australia, 17% from Indonesia, and another 17% from North America.
If the Strait of Hormuz remains closed, the “gas-to-coal switching” phenomenon in developed economies (such as these three major markets) is expected to drive coal shipment growth in the short to medium term. Under this scenario, global seaborne coal volumes are forecast to grow by up to 1% in 2026, and by 0.5% to 1.5% in 2027; this is 1 and 3 percentage points higher, respectively, than in a scenario where the strait is quickly reopened.
In the long term, regardless of the navigational status of the Strait of Hormuz, coal imports by these three major economies are expected to gradually decline. Installed capacity for renewable energy power generation is projected to continue expanding, and the recent surge in energy prices may further accelerate this transition. Although some countries have delayed their coal-fired power plant phase-out schedules, coal power is still expected to be less cost-competitive than renewable energy, thus limiting the actual impact of such deferrals.
