Chinese thermal coal imports will stabilize at around 100 million tonnes a year instead of rising, as previously expected, because of improvements to the country’s own coal output and rail capacity, Deutsche Bank said in a research note.

Transport bottlenecks and low capacity have so far led most forecasts to expect strongly rising thermal coal imports into China but Deutsche Bank said recent analysis showed these problems may start to be remedied by new additions to capacity.

“Owing to ongoing improvements in China’s rail capacity and production increases particularly in Shanxi and Inner Mongolia, we expect that net imports of thermal coal will remain stable just above the 100 million-tonnes level, instead of rising significantly in the next five years,” the bank said in its note on Wednesday.

“Together, we expect that these factors will support production growing at rates similar to domestic demand growth, leaving net imports little changed in the medium term,” it added.

Deutsche Bank also said that despite higher total demand, Chinese net imports in the first five months of this year were between 5 million and 11 million tonnes a month and at similar or lower levels than last year.

Regarding Japanese imports, Deutsche Bank said thermal coal shipments dropped below the 2010 level in April and May, while LNG shipments picked up.

“The majority of adjustment within the power sector to date has been in the form of rotating blackouts, energy conservation, demand reduction, and increases in gas-fired generation, rather than coal-fired generation,” the bank said.

Japanese monthly coal consumption has been between 3 million and 5.5 million tonnes this year, slightly below levels seen in the two previous years.

Overall, Deutsche Bank said that it expects coal markets to be roughly balanced in 2011, undersupplied in 2012, and balanced again in 2013.

“We lower our H2-2011 API4 price forecast to $132 a tonne while keeping 2012 and 2013 price forecasts unchanged at $145 and $115 per tonne, respectively,” the bank said.

Coal import prices to Europe are going to average $137 per tonne in the second half of 2011 and rise to $150 a tonne in 2012 before trailing off in 2013, the bank said.