Turkey's Jan-Aug thermal coal imports hit four-year low amid record hydro output

Turkey's thermal coal imports fell to their lowest January-August level since 2022, as record hydropower output curtailed coal-fired generation, while supply disruptions and weak plant economics also weighed on shipments, even as the fuel retained a competitive edge over gas-fired generation amid ongoing geopolitical turmoil.

Total thermal coal imports in the January-August period stood at 19.9 million metric tons, down 18.77% from the year-ago period and the lowest level since 2022, when Turkey imported 17 million mt in the first eight months of 2026, according to Turkish Statistical Institute data.

"The fall in Turkey's thermal coal imports is pretty much due to the better-performing hydro generation," a UAE-based trader said.

The drop in import volumes reflected weaker thermal coal power output during the period, as generation from renewables soared to a multiyear high, driven primarily by record hydrogeneration following a subdued 2025 output due to droughts in parts of the country.

Coal generation from imported steam coal and domestic hard coal fell below 2 terawatt-hours in May 2026, its lowest monthly level since April 2013. The decline has been driven by flat coal-fired power demand, a steep increase in hydropower generation — which reached its highest January-August level on record — and a rise in wind generation, up 12% year over year, aided by 1.8 GW of additional capacity added year over year in July, Sylvain Dauphin-Cognet, executive director and head of EMEA Power and Renewables Research at S&P Global CERA, said.

Power generation through hard coal, lignite and imported coal declined to 67.2 TWh in January-August from 77.9 TWh in the year-ago period, while output from renewables surged above 60% of total power generation in Turkey during the same period, up from 47.2% in the first eight months of 2025, according to Turkish Electricity Transmission Corp. data.

"The real problem is that hydro had been running so high that the need for electricity from imported coal decreased a lot," a Turkey-based buyer said.

Hydrogeneration dents coal's prospects

After falling to its lowest levels since 2023 in January-August 2025 due to low water levels, hydrogeneration output averaged 9.39 TWh over the eight-month period and emerged as the largest source of power generation in Turkey.

In January-August, hydro power contributed 75.16 TWh out of the 248.43 TWh total, while coal generation dropped to 67.22 TWh, even as geopolitical headwinds tightened LNG and natural gas supply, pushing for higher coal consumption across much of the world, market participants said.

"There was too much rain and hydro production this winter, so coal was not competitive," another UAE-based trader said.

In June, a Turkey-based trader noted that power prices in Turkey were low due to strong renewables output, making it uneconomical for power plants to burn coal. This prompted some operators to run at lower capacity, further weakening seaborne thermal coal demand.

Though Europe's coal capacity has dropped considerably in recent years due to the phasing out of coal plants, the region's appetite for thermal power has remained firm since the Middle East war broke out. Turkey's coal-fired power plant operators, however, were unable to benefit from gas falling behind in the merit order.

"In Europe, the main driver for the year-on-year decline in coal imports is the drop in Turkey, where we expect a fall of 8 million mt, down to 30 million mt, owing to weaker coal demand for power generation," the International Energy Agency said in its midyear coal update.

In the January-August period, the weakness in Turkish demand capped gains in the prices of Russian thermal coal delivered to the Mediterranean, Middle East and North Africa markets — Turkey being the primary consumer of high-calorific value Russian material in the region — despite prices across the board rising sharply due to tensions in the Middle East. Non-Russian-origin coal delivered to the Mediterranean and MENA region moved to a greater extent than its Russian counterpart.

Platts, part of S&P Global Energy, assessed CIF Med 45,000 mt 6,000 kcal/kg NAR Russian-origin coal at an average of $98.75/mt in January-August, compared with $85.85/mt in the year-ago period. The Platts-assessed CIF Med 75,000 mt 6,000 kcal/kg NAR non-Russian-origin coal averaged $112.15/mt in the same period of 2026, up from $91.45/mt in January-August 2025.

Signs of higher consumption

While coal imports appeared on course for their lowest volume since 2022, signs emerged that consumption could rise in the near term, as coal-fired power generation increased in July and August, market participants said.

The Turkey-based trader noted that while the focus on renewable energy continues to expand, generation from the sector remained highly volatile, reinforcing coal's role in power generation needs.

"There is solar and wind, but those do not have the highest industrial output," the trader said.

Generation from thermal coal and lignite exceeded 10 TWh on a monthly basis in July and August, while hydro output fell below the 10 TWh mark for the first time since February. Market participants expected the trend to continue as winter approached, with gas-fired power generation remaining well behind coal amid the steep rise in gas prices this year.

However, concerns lingered over the recent rally in coal prices rendering the fuel uncompetitive.

"I guess any coal price above $140-$145/mt CIF range would fall into the no-profit zone; this number can be a bit lower or higher for individual plants depending on efficiency, location, dispatch port conditions, etc.," the Turkey-based trader said.