Japan<\/a> can\u2019t import enough coal to replace liquefied natural gas (LNG) lost from the Strait of Hormuz, leaving utilities exposed despite a policy shift to raise coal use after supply disruption tightened global markets.<\/p>\nThe International Energy Agency said the closure of the strait due to the US-Israel war on Iran has removed nearly 20% of global LNG supply, with Japan among the most exposed importers due to its reliance on shipments through the route.<\/p>\n
\u201cOperators will be fairly hesitant to engage in a whole lot of coal procurement,\u201d Walter James, an energy finance specialist for Japan at the Institute for Energy Economics and Financial Analysis, told Asian Power via Zoom.<\/p>\n
He noted that whilst Japan eased limits on coal plant use to deal with the LNG shortfall, that policy will be reinstated next fiscal year.<\/p>\n
The Ministry of Economy, Trade, and Industry suspended a 50% cap on plants operating below 42% thermal efficiency, covering about 9 gigawatts of capacity.<\/p>\n
The policy offers limited relief. Government estimates show potential LNG savings of about 500,000 tonnes a year, just over 10% of the roughly 4 million tonnes Japan imports through the strait annually.<\/p>\n
Zero Carbon Analytics assigned Japan the highest disruption score among major importers at 6.4, ahead of South Korea at 5.3 and India at 4.9, reflecting exposure to supply risk.<\/p>\n
Coal supply is not the main constraint. Indonesia has signalled it could raise output if prices hold, whilst markets remain well supplied, Sholpan Gabbassova, a senior research analyst for thermal coal markets at energy-focused research and analytics company Wood Mackenzie Ltd., told Asian Power.<\/p>\n
\u201cAssuming the strait reopens in early May 2026, there is no sustained price catalyst and no need for above-market contract premiums,\u201d he said via Zoom.<\/p>\n
Utilities are anchoring purchases to Australian Newcastle coal, a benchmark for Japanese contracts, limiting appetite for aggressive buying during a short disruption window, James said.<\/p>\n
Regional competition may increase as Japan turns to spot markets. Rising demand from Japanese utilities could compete with buyers in South Korea, Taiwan, and India for available cargoes.<\/p>\n
Japan could offset gas losses by raising coal use modestly without restarting idled plants, Xiaonan Feng, principal analyst for Asia-Pacific power and renewable research at Wood Mackenzie, said in an email reply to questions.<\/p>\n
Duration uncertainty remains the key constraint, with utilities avoiding long-term commitments until clarity emerges on the Strait of Hormuz\u2019s reopening.<\/p>\n","protected":false},"excerpt":{"rendered":"Utilities limit coal buying amidst uncertainty over the disruption duration. Japan can\u2019t import enough coal to replace liquefied…\n","protected":false},"author":2,"featured_media":20757,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[217,215,214,216],"class_list":{"0":"post-20756","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-business-of-japan","10":"tag-japans-business","11":"tag-japanese-business"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/20756","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=20756"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/20756\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/20757"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=20756"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=20756"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=20756"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}