【SMM Analysis】Tight Supply in Southeast Asia + Surge in Domestic Demand: Multiple Catalysts for the Rising Price of Nutshell Charcoal Imports

According to the latest data from the General Administration of Customs, China imported 11,476.7 mt of husk charcoal in June 2025, down 1% MoM and 9% YoY. The average import price of husk charcoal in June was $652.95/mt. The average import price in May was $593.18/mt, indicating a 10% MoM increase in the average import price of husk charcoal. The reasons for the increase in import prices can be attributed to the combined effects of multiple factors, specifically the following four aspects:

1. Continuous contraction in the raw material supply side

- Disaster impacts in major Southeast Asian production areas

As the main global supplier of coconut shells, many Southeast Asian countries experienced natural disasters such as droughts, pests, and diseases in 2024. Taking Thailand as an example, the reduction in fragrant coconut production led to a sharp decline in the supply of coconut shell raw materials. Meanwhile, countries like Indonesia and the Philippines faced significant YoY decreases in exports due to tight coconut shell resources. This shortage of raw materials directly affected the production of husk charcoal. In June 2025, the tax-inclusive factory price of imported coconut shell carbonization materials exceeded 8,000 yuan/mt, representing an increase of over 20% from the beginning of the year.

- Policy adjustments in exporting countries

To safeguard domestic industrial demand, some producing countries have begun to implement export quotas or restrictions. For instance, due to the disaster-induced shortage of coconut shell raw materials in Thailand, priority was given to meeting the production needs of local activated carbon enterprises, indirectly reducing export volumes to China. Additionally, countries like Indonesia have gradually tightened coconut shell export permits to protect forestry resources, further exacerbating the supply tightness in the international market.

2. Rising transportation and production costs

- Rigid increase in logistics costs

In June 2025, China experienced a "second consecutive increase" in refined oil prices, with gasoline prices rising by 260 yuan per ton, directly pushing up international maritime freight rates. Coupled with port congestion in Southeast Asia caused by disasters, container freight rates from Indonesia to China increased by 15% YoY in Q2 2025, with transportation costs per ton increasing by approximately $30.

- Cost pressures from upgrading production processes

To meet China's newly implemented environmental protection standards (such as the "Phytosanitary Requirements for Imported Organic Cultivation Media" effective from July 1, 2025), export enterprises need to add processes such as steam treatment and chemical purification. For example, to comply with China's new requirements for heavy metal content in husk charcoal, enterprises in the Philippines have incurred an additional cost of approximately $2 million per production line for upgrades, ultimately passing on the costs through price increases. III. Structural Growth in Domestic and Overseas Demand

3.Driven by Domestic Environmental Protection Policies

China's "14th Five-Year Plan" for hazardous waste utilization has spurred a surge in demand for industrial wastewater treatment. The market size for nutshell-based activated carbon is expected to reach 4.23 billion yuan by 2025, with a compound annual growth rate (CAGR) of 21.5%. Taking Ningxia Tingyuan Fruitwood Company as an example, its project producing 10,000 mt of nutshell-based activated carbon annually faces undersupply, with products primarily used in tap water purification and food processing. This expansion in domestic demand directly boosts both imports and prices.

4. Indirect Impacts of Exchange Rates and Trade Environment

Fluctuations in RMB Exchange Rate

In June 2025, the RMB appreciated against the US dollar, fluctuating rangebound between 7.15 and 7.19, compared to around 7.10 in May. Exchange rate fluctuations prompted importers to purchase high-priced goods in advance to lock in costs, with approximately 5% of the increase in June's average import price attributed to exchange rate expectation management.

Long-Term Trade Barriers

Although China has not directly restricted the import of nutshell-based activated carbon, new phytosanitary regulations implemented in 2025 require export enterprises to obtain registration and certification from the General Administration of Customs. Currently, only 60% of Southeast Asian enterprises have completed registration, forcing some small and medium-sized suppliers to exit the Chinese market and strengthening the bargaining power of top-tier enterprises.

Future Trend Predictions

In the short term, with the gradual harvesting of coconut shells in major Southeast Asian producing regions in the second half of 2025, raw material supplies may improve slightly. However, transportation costs and environmental protection investments will continue to support prices fluctuating at highs. In the medium and long term, China's nutshell-based activated carbon market will exhibit a dual-track pattern of "imported high-end products and domestically produced scaled products" — imported products will focus on high iodine value activated carbon (such as for semiconductor wafer manufacturing), while domestically produced products will target low and mid-end industrial applications. Enterprises need to monitor export policy dynamics in countries like Indonesia and the Philippines and establish alternative raw material (such as apricot shell and peach shell) supply chains in advance to mitigate price fluctuation risks.