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A disruption centered on LNG tankers in the Persian Gulf is now reshaping demand for bulk carriers thousands of miles away. Global seaborne coal exports increased 3% year over year from January through September 2026, reversing a 4% contraction in 2025, according to new IFCHOR GALBRAITHS research. The strongest LNG-linked change is occurring outside China and India: thermal-coal imports into those two giants fell 7% and 10%, respectively, while imports across the rest of Asia increased by roughly 10%, led by markets including South Korea, Japan, Vietnam, Pakistan and Bangladesh. The International Energy Agency independently says the Hormuz LNG disruption has driven gas-to-coal switching in Japan, Korea and other electricity markets. Metallurgical coal trade has also risen about 10%, although that is primarily a steel and raw-material story rather than a direct substitute for LNG.
An LNG Disruption Is Creating Dry-Bulk Cargo
Hormuz carries almost no coal. Yet the collapse in Gulf LNG availability has increased the value of coal-fired generation in Asian markets that can switch fuels.
Higher LNG prices and reduced Gulf availability are directly increasing coal-fired generation in some Asian electricity markets.
The metallurgical-coal boom is primarily linked to steelmaking demand, Chinese supply disruptions, India and Indonesia rather than substitution for LNG.
The Growth Is Coming From Markets That Can Switch Fuels
China's and India's falling seaborne thermal-coal purchases hide a very different trend across the rest of Asia.
| Market | 2026 Coal Signal | LNG / Power Exposure | Likely Coal Sources | Dry-Bulk Effect |
|---|---|---|---|---|
| South Korea | STRONG SWITCH Coal demand +6% IEA expects about 119 Mt of coal consumption and imports rising more than 10%. | High LNG exposure plus nuclear outages made coal-fired generation more competitive. | Australia, Indonesia, Russia and other Pacific suppliers. | Additional Pacific Panamax/Kamsarmax and selected Capesize employment. |
| Japan | UPWARD REVISION ~124 Mt thermal imports IEA raised its outlook because of the Middle East energy shock. | Large LNG-importing power system with existing coal capacity available for substitution. | Australia remains the principal high-energy thermal-coal supplier. | Supports long-haul Australian coal cargo demand into Northeast Asia. |
| Vietnam / Southeast Asia | STRUCTURAL GROWTH Vietnam ~62 Mt Up from about 55 Mt in 2025; wider Southeast Asian imports forecast around 164 Mt. | Strong electricity growth, weather-related demand and high LNG prices reinforce coal use. | Indonesia, Australia and regional suppliers. | Strong exposure to Panamax, Kamsarmax and Supramax cargoes. |
| Pakistan / Bangladesh | LNG VULNERABLE IG reports higher buying Included among markets driving the roughly 10% rest-of-Asia increase. | Both relied heavily on Hormuz-linked LNG before the crisis; gas is significant in power generation. | Indonesia, South Africa and potentially Australia depending economics and specifications. | Incremental smaller-bulker and Panamax demand depending terminal constraints. |
| China | IMPORTS LOWER Thermal -7% IFCHOR's March-September comparison shows falling seaborne purchases. | Higher LNG prices support coal burn, but domestic coal and Mongolian landborne supply reduce seaborne dependence. | Indonesia, Australia, Russia plus substantial domestic and Mongolian supply. | Not the primary source of the thermal-coal shipping rebound. |
| India | IMPORTS LOWER Thermal -10% IFCHOR shows weaker seaborne demand over the reference period. | Domestic coal production and inventory policies have limited import needs despite energy-market volatility. | Indonesia, South Africa and Australia. | Thermal demand has not been the main positive dry-bulk driver, although recent stock declines have tightened fundamentals. |
LNG-constrained importers are increasing purchases from exporters such as Australia and Indonesia, creating more dry-bulk cargo even though the disruption itself is centered in the Gulf.
China and India remain weak on seaborne thermal imports, and the IEA still expects thermal-coal trade to resume its structural decline once gas markets normalize.
Which Bulk Trades Gain If Hormuz LNG Stays Tight?
Switch between three LNG scenarios to see where the dry-bulk exposure is concentrated. This is a qualitative market map, not a freight-rate forecast.
Expensive and scarce LNG keeps gas-to-coal switching economically relevant in Northeast and parts of South and Southeast Asia.
Existing coal capacity and high LNG exposure create one of the clearest fuel-switching channels.
Coal imports remain firm while expensive LNG raises the value of dispatching coal generation.
Growing power demand combines with LNG-price exposure and structural growth in coal-fired generation.
High dependence on Gulf LNG makes power markets particularly sensitive to prolonged supply shortages.
LNG economics support coal burn, but domestic production and landborne supply constrain seaborne thermal demand.
Large coal demand does not automatically translate into higher imports because domestic production remains central.
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