Asian buyers shift from LNG to coal — Reuters

Coal is gaining an advantage over liquefied natural gas (LNG) as Middle East tensions drive up natural gas prices due to concerns about possible supply disruptions through the Strait of Hormuz. Meanwhile, coal prices have remained stable, making it increasingly attractive to Asian energy buyers, Reuters reports.

Despite no actual disruptions yet, worries over potential shipping constraints have already driven up LNG prices in the region. Meanwhile, according to LSEG data, the price of Australian Newcastle coal, used in Japan, South Korea, and Taiwan, has reached $109.41 per ton. That’s roughly 13% below current LNG prices.

Kpler data shows Japan has already ramped up its coal purchases. The country imported 6.57 million tons of the fuel in June, up from 6.39 million in May, with further shipment growth expected in July. The analytics firm forecasts the figure to reach 7.23 million tons.

China and India aren’t ready to ditch natural gas just yet. However, the current geopolitical tensions could force them to lean harder on domestic coal, according to Reuters.