Asia re-employs coal
Several Asian economies are reverting to coal after an LNG supply shock and closure of a key shipping route pushed prices sharply higher — a pragmatic move to secure power but one that risks blowing a hole in regional climate commitments (indexbox.io). Analysts also note a geopolitical angle: China may be better positioned to press for concessions from the U.S. while Washington is distracted by Middle East turmoil, complicating climate and trade diplomacy (tpimediagroup.org).
Wood Mackenzie says the Strait of Hormuz disruption has removed about 1.5 million tonnes of LNG per week (2.2 bcm), roughly 19% of global LNG exports, and warns Northeast Asian demand could fall 4–5 million tonnes through Q3 2026 under a two‑month disruption scenario. (woodmac.com) Asia’s spot benchmark (JKM) has surged above US$20 per MMBtu, and some buyers have paid more than US$28/MMBtu for replacement cargoes as utilities scramble for short‑term supply. (woodmac.com) Grid and market data show concrete fuel switches: Bangladesh raised coal‑fired generation and increased coal imports in March, the Philippines is ramping coal output while cutting LNG burn, and Vietnam’s state EVN is negotiating extra coal supplies as utilities seek alternatives to pricey LNG. (argusmedia.com) Thermal coal moved sharply higher this month — ICE Newcastle futures traded around US$141/ton and broader seaborne coal prices rose roughly 18–20% month‑to‑date, tightening coal markets even as demand for coal power rises. (barchart.com) Wood Mackenzie has cut its 2026 forecast for Asian LNG imports to about 5 million tonnes from 12.4 million tonnes, reflecting expected “demand destruction” as higher contract costs kick in from June under oil‑linked pricing formulas. (usnews.com) Global Energy Monitor calculates about US$107 billion of planned LNG terminals and pipelines in South Asia are now exposed to risk, a vulnerability that markets and project finance sources warn could delay or cancel a wave of projects. (globalenergymonitor.org) Analysts note a geopolitical overlay: reporting on the delayed Trump‑Xi summit and ongoing U.S. focus on the Middle East says Beijing has gained additional diplomatic room to press on trade and other disputes while Washington is preoccupied. (bloomberg.com) Separate trackers and research groups flag that the region’s temporary coal rebound — including delayed retirements at large plants such as Thailand’s Mae Moh and ongoing coal approvals in China — is already complicating progress toward national climate targets and net‑zero pledges. (gem.wiki)
