BEIJING—China's growing appetite for imported coal has ignited coal prices and fueled deal making on the belief that the country, once a major coal exporter, will be a long-term buyer of foreign coal.

Last week, the benchmark price at Australia's Newcastle port for thermal coal—the type burned in power plants—hit $108 a metric ton, the highest since October 2008, according to globalCOAL, an international trading platform. Australia is one of China's biggest coal suppliers.

China's coal-importing binge started last year when international prices were low as a result of the recession while Beijing's stimulus spending kept domestic prices relatively high. With coal the primary fuel for China's economic engine, the buying is continuing even as global prices rise. China's coal imports in March jumped 165% from the same month last year.

The country's growth amid the global economic rebound is already driving up a swath of commodities, including iron and oil. But so far—at least for coal—prices remain below the pre-recession highs of 2008, when Newcastle coal breached $180 a ton.

Still, in March, Goldman Sachs raised its estimates for global coal prices, with supplies of certain types of coal remaining tight through 2011 because there aren't a lot of new mines opening soon.

In a quarterly report, the China Electricity Council, an industry trade group, recently warned that demand for thermal coal used in power plants would remain high for the rest of this year because of strong growth and supply constraints. More than 70% of China's electricity comes from coal-fired power plants, and the country's power-generating capacity is expected to expand another 10% this year.

The surge in Chinese demand is prompting acquisitions. Last year, Chinese miner Yanzhou Coal Mining Co. bought Australia's Felix Resources Ltd. for $3.2 billion. St. Louis, Mo.-basedPeabody Energy Corp., meanwhile, is trying to buy Australia's biggest coal exporter, Macarthur Coal Ltd.

For decades, China was a net exporter of coal, selling some 83 million metric tons more than it bought internationally in 2003. By 2007, that had started to change, with China recording net imports in some months, a development that helped send global coal prices to record highs.

But last year trade swung dramatically, with China importing nearly 126 million metric tons and exporting just 22 million. China swallowed more than a fifth of the 600 million tons of total seaborne-coal trade last year, jolting the global coal business at a time when steel mills and power plants elsewhere were sidelined by recession. The trend has continued this year, with coal imports in the first three months of 2010 jumping 226% from a year earlier to 44.4 million tons. That is still a fraction of China's overall consumption, which amounted to 1.4 billion tons of coal in 2008.

"Coal producers and freight operators were dreading the economic crisis and then China came to the rescue, single-handedly supported prices and stopped them from falling further," said Zhou Xizhou, an analyst at IHS Cambridge Energy Research Associates.

Suppliers are scrambling to keep up. Vic Svec, head of investor relations for Peabody Energy, estimated that Asia will add enough power plants in the next three years to burn the equivalent of a billion more tons of coal annually, with most of that new demand from China.

Mr. Svec said Peabody has long sold China coal from its mines in Australia, but in the past two years the company has increased shipments from its Powder River Basin mine in Wyoming. Prices for contracts in 2014 are higher than prices for coal for immediate delivery, he said, a sign that traders think the supply-and-demand balance will be tighter in the future.

Beyond that overall growth in demand, the import surge also stems from a growing mismatch between the coal China produces domestically and the coal it needs. China has some of the world's biggest reserves of low-quality thermal coal, but such coal tends to have higher levels of pollutants like sulfur.

The newer, cleaner power plants being built require better grades of coal. And many of those plants are on the coast, where it can be less expensive to buy seaborne coal than to bring it by rail from China's remote inland regions, where most mines are.

China also has inadequate domestic supplies of higher-grade coking coal, which is a key ingredient for making the steel that feeds the country's booming construction industry. Coking coal and other types of coal used to make steel, known as metallurgical coal, accounted for 27% of China's coal imports in 2009, from 16% in 2008, according to J.P. Morgan.

Some factors driving China's coal buying are temporary. A key reason for March's big jump in coal imports was a major drought in southwestern China that left rivers too low to power hydroelectric dams, causing greater reliance on coal-fired plants. Meanwhile, a string of mining accidents in recent weeks has prompted a nationwide safety crackdown that could slow production, according to J.P. Morgan. And to boost safety, the government last year began a consolidation of mines that reduced output.

There is a big risk that could reverse China's demand for coal: The housing boom could stall. But many analysts think that is unlikely to curb demand for steel and coking coal because the government recognizes the need for the construction sector to drive the economy.