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The future of coal:
A historic turning point
on the horizon

The global coal market has experienced a turbulent three years, with demand dropping sharply during the COVID-19 pandemic, only to skyrocket as a post-COVID-19 rebound that coincided with Russia invading Ukraine. Global coal demand reached an all-time high in 2022 and for 2023 the black rock was still central to the world’s economy as the largest energy source for electricity generation, steelmaking and cement production. THERESA SMITH reports.

Concurrently, coal is the largest source of manmade CO2 emissions and curbing consumption is essential to meeting international climate targets. The International Energy Association (IEA)’s Coal 2023 analysis suggests a historic turning point is coming and projects a coal demand peak within this decade under today’s policy settings. This is due to a structural decline in coal usage in developed economies and a weaker economic outlook for China, which has pledged to reach peak CO2 emissions before 2030.

Still, questions remain about when this peak demand will happen, at what level and how fast coal consumption will decline after that point.

Coking coal price forecast and the green transition

Regarding global supply, research firm BMI forecast the price of Australian coking coal price for 2023 at US$295 per ton.* BMI’s Sabrin Chowdhury, Head of Commodities, says moving into 2024 she sees prices settling at an annual average of US$300 per ton as demand stabilises. In the long-term BMI expects coking coal prices to trend downward as global blast furnace steel production slows and steelmakers transition to cleaner steelmaking processes.

It expects slowing steel production in importing nations, except India, will cap coking coal demand and consequently prices. It also foresees a greater adoption of electric arc furnaces as well as the use of green hydrogen in steelmaking.

“This paradigm shift will reduce the need for coking coal in the production of steel, hampering the fossil fuel’s long-term demand and price outlook,” states Chowdhury.

Nevertheless, she predicts that coking coal prices will remain high by historical standards over the 2024 to 2027 period because prices now start from a higher base following Russia’s invasion of Ukraine. And BMI does not expect a full price collapse as supply will remain tight globally.

Supply of coking coal and projected risk factors

Current uncertain global conditions present risk to coking coal price forecasts, says Chowdhury. On the downside the deep recession in developed markets could exacerbate already weak global manufacturing, steel production and construction sectors. This would lead to a decline in coking coal consumption, further impacting prices negatively. Additionally, a stronger supply outlook could contribute to lower prices due to increased inventory.

“On the upside, there is the potential for Mainland China to experience a resurgence in construction activities and higher growth in steel production. In such a case, Mainland China could increase its coal imports from Australia back to levels prior to 2020. The increased demand from China would cause a massive rally in coking coal prices,” says Chowdhury.

BMI sees China’s demand for coking coal peak in the latter half of the decade. In the long term there is an expectation that green hydrogen, to be produced without use of fossil fuel, will play an increasing role in decarbonising steel production.

Europe thermal coal demand takes a dip BMI sees Europe driving global coal demand weakness at the start of 2024. European markets sought to diversify away from Russian energy sources in 2022, creating a short-term rise in coal demand at the start of the Russia- Ukraine conflict.

“Rising coal stockpiles and lower demand in Europe has compelled some market participants to resell excess inventory to Asia and Africa, putting additional pressure on global prices. Throughout H123, thermal coal from Europe has been shipped to markets such as Morocco, Senegal and Guatemala,” says Chowdhury. In the longer term, even as European coal demand declines, BMI sees demand starting to show signs of revival in Mainland China.

“Data from China customs shows a 163% YOY increase in coal imports into Mainland China during the first eight months of the year, reaching 21.5Mt in August 2023.

“Yet, this rise in imports has failed to benefit Newcastle thermal coal prices, which have largely range traded between US$130-160/t in H2 2023.” Chowdhury explains.

China imported more thermal coal because hydropower generation in southwest China decreased 18% between mid-2022 and mid-2023, with fossil fuel power generation increasing 7% during that period.

“Coal was regarded as critical during Mainland China’s National Congress in 2022 and in its two sessions which met in March 2023. Developments in China will have the largest impact on the outlook for global coal demand, since China’s power sector alone accounts for one third of global coal consumption according to the IEA,” states Chowdhury.

Thermal coal pricing going forward

BMI maintains its long-term forecast of prices averaging US$170/t in 2024 before falling to US$130/t in 2027. It sees the EU’s accelerating shift towards alternative power weaking coal’s dominance in the energy sector. “Even in the unlikely event of a rapid de-escalation of the Russia-Ukraine conflict, we expect that policy direction in the EU is now firmly set on greater energy independence from Russia.

“On the global demand side, the rapid expansion and acceleration of renewable energy in the EU will allow for reductions in coal use. In Mainland China, the steady build-up of renewable power and climate goals will also translate to reduced demand for coal upon the installation of necessary power grids and supply.

“On the supply side, production is expected to increase in Mainland China and India, reducing reliance on imports. Apart from these two countries, there are no strong signs of growth.

“Firms are likely to increasingly divest away from their coal resources in the longer term as energy trends shift away from coal, alongside increasing climate concerns. Governments, banks and mining companies continue to show a lack of appetite for coal, particularly thermal coal.

“Most recently, in January 2023, Glencore was pressured by shareholders for greater disclosure on its thermal coal production and capital expenditure, with shareholders citing concerns about the firm’s climate goals and added risks from its coal assets,” says Chowdhury.

She adds the main risk to prices lie with a recession in the world economy, a significant slowdown in Mainland China’s rebound or the US dollar strengthening to 2022 highs.

African coal demand and supply led by South Africa

The IEA states that coal consumption in Africa decreased by 4.4Mt in 2022, to a total of 187Mt because of persistent issues with Eskom’s coal plant fleet. This decrease was modest though because consumption was already reduced thanks to the COVID-19 pandemic.

Stagnant economic activity and persistent loadshedding in 2023 continued to drag down South Africa and – by extension –the entire continent’s coal demand. The IEA forecasts a U-turn on the continent’s coal consumption trend for the period to 2026 though, with total demand increasing to 193Mt over the next three years. It credits this growing figure to a better forecast for Eskom’s coal-fired power stations.

While it points out that 84% of Africa’s coal consumption in 2022 came from South Africa and the poor performance of Eskom’s coal-fired power stations decreased overall coal demand, the IEA predicts this continued demand for years to come.

Eskom’s Just Energy Transition, funded by the World Bank, was meant to kick off with the decommissioning of 56-year-old Komati coal plant, which went dark in October 2022. “However, given the critical supply situation, South Africa’s climate policy body recently suggested delaying the retirement of coal plants without specifying a timeline,” the IEA states.

By Mining Review Africa, January 29 2024

This month's top international coal headlines

  • China's first quarter coal imports surge, defying gloomy forecasts — Reuters
  • U.S. banks pledged to stop funding coal plants—but they’ve found a loophole
    — Fast Company
  • Meeting growing global demand with US coal — Count on Coal
  • Amid explosive demand, America is running out of power — Count on Coal
  • BigMint Interview: Coal abatement technologies key for India to achieve climate targets — BigMint Bureau
  • China to build more coal mines to feed surging power capacity — Bloomberg
  • Global coal power grew 2% last year, the most since 2016, GEM survey says
    — Reuters
  • BMO drops anti-coal policy amid Wall Street rebuke of ESG — Bloomberg
  • TURKEY DATA: February thermal coal imports rise 40% on year — Platts CTI
  • Med-delivered thermal coal price at nine-week low amid absent trading activity
    — Platts CTI
  • Indian demand picks up with Indonesia, Australia deals — McCloskey
  • Power demand explosion to drive trading boom, liquidity challenges remain
    — Platts CTI
  • Richards Bay prices gain ground on supply worries
    — Southern African Coal Report
  • API2: EU coal delivered futures corrected upward amid rising freight rates
    — i-Energy
  • API4: SA futures rise due to higher freight rates — i-Energy
  • EMEA thermal coal deliveries strengthen amid Turkey local elections — Platts CTI
  • Atlantic thermal coal prices retreat from 19-week high amid muted demand
    — Platts CTI
  • Atlantic thermal coal prices diverge after Easter break — McCloskey
  • Indian thermal import interest rises — McCloskey
  • Hopes of demand revival dwindle in Asian thermal coal market — Platts CTI
  • Richards Bay hovers above $100/t, supported by Europe
    — Southern African Coal Report
  • Transnet’s weekly coal railings highest in FY23/24 — Southern African Coal Report
  • Mafube Coal’s future threaten by licencing impasse
    — Southern African Coal Report

Headlines from earlier this year

March 2024
  • Thermal coal derivative volumes slide 9% on month to 25.8 Mt: LEBA — Platts CTI
  • Atlantic thermal coal prices touch 15-week high amid bullish sentiment
    — Platts CTI
  • With Coal, We Must Consider Energy Reliability — American Coal Council
    — Platts CTI
  • Russian coal producers’ loss could be Colombian, South African miners’ gain
    — Platts CTI
  • US banks pledged to stop funding coal plants—but they’ve found a loophole
  • South Africa coal exports surge to Pakistan, Vietnam — McCloskey
  • API2: Further sanctions on Russia propel EU futures to three-month high
    — i-Energy
  • API4: SA futures current month down, front month up—positive market fundamentals for pricing — i-Energy
  • Exxaro's 'money or the box' conundrum — Miningmx
  • Atlantic thermal coal prices retreat from three-month high — Platts CTI
  • China coal group says peak demand imminent as clean power grows
    — Bloomberg
  • Price hikes weigh on Indian import activity — Platts CTI
  • Rising freight cost weigh on demand in Asian thermal coal market — Platts CTI
  • Pretoria is pivoting back to energy realism with King Coal — IOL
  • Richards Bay hovers above $90/t, propped up by India
    — Southern African Coal Report
  • Asia-Pacific Panamax freight rates rise amid higher bunkers, FFA gains
    — Platts CTI
  • German lignite hits 2024 high, imports rise as wind hits 13-week low — Platts CTI
  • API2: EU futures reached a two-month high level — i-Energy
  • API4: SA futures touched the highest levels in the past month — i-Energy
  • European thermal prices back above $100/t — McCloskey
  • Indian buyers book S. Africa, Russia cargoes — McCloskey
February 2024
  • Indonesia, South Africa aim to regain lost share in Indian coal market — Reuters
  • Appeal lost to halt expansion of last UK coal mine — BBC
  • South Korea's thermal coal imports slide in January — McCloskey
  • Asia-Pacific Panamax freight rates largely firmer amid stronger tonnage demand
    — Platts CTI
  • Richards Bay market finely balanced above $90/t
    — Southern Africa Coal & Metals Report
  • Junior miners invited to apply for 5-yr RBCT allocation
    — Southern Africa Coal & Metals Report
  • Indian power plants shift to South African coal
    — Southern Africa Coal & Metals Report
  • RBCT exports to rise in March, as trucking too costly
    — Southern Africa Coal & Metals Report
  • Mild weather, elevated stockpiles weigh on Atlantic thermal coal demand
    — Platts CTI
  • Indian import enquiries emerge, but deals slow — Platts CTI
  • Asian thermal coal demand improves as Chinese buyers seek prompt cargoes
    — Platts CTI
  • Indian power plants shifting to South African coal — McCloskey
  • Asia-Pacific regional Supramax freight rates surge amid bullish discussions
    — Platts CTI
  • Richards Bay trades near 3-year low, with little upside — Platts CTI
  • Western nations fail to deliver green funds to S. Africa — Platts CTI
  • Asian thermal coal market hopes for renewed Chinese demand as buyers rejoin market — Platts CTI
  • SOUTH KOREA DATA: Jan coal imports rise 8% on year amid lower average landed prices — Platts CTI
  • Atlantic thermal coal price weakness persists amid high stockpiles — Platts CTI
  • Coal India to add new mines, expand existing ones to meet higher demand, chairman says — Reuters
  • Indian importers book at least 4 multi-origin cargoes — McCloskey
  • THERMAL COAL SERIES: JKT coal reliance faces threat from renewables, nuclear power — Platts CTI
  • Richards Bay prices fall on March trade — McCloskey
  • API2: EU coal futures retreated to lower levels — i-Energy
  • API4: SA futures decline in the current month, rise in the front month — i-Energy
  • S. Africa prices edge up on India sponge iron buying
    — Southern African Coal Report
  • S. Africa officials look to bring back shut coal plants
    — Southern African Coal Report
  • Thermal coal derivative volumes up 18% on month to 28.5 Mt in Jan: LEBA
    — Platts CTI
  • The future of coal: A historic turning point on the horizon — Mining Review Africa
  • S. Africa to invest billions to keep coal plants open — McCloskey
  • Richards Bay edges up from July low, NW Europe steady — McCloskey
  • EMEA thermal coal import prices rise slightly on modest demand — Platts CTI
  • Atlantic thermal coal prices drop at end of week after remaining resilient
    — Platts CTI
  • THERMAL COAL SERIES: South Africa's logistics hurdles turn boon for growing Indian appetite — Platts CTI
  • European coal supply overhang persists as winter ends — McCloskey
  • Transnet receives locomotive batteries through RBCT partnership
    — Mining Weekly
  • Indian buyers pick up thermal coal, petcoke — McCloskey
  • Asian thermal coal prices rangebound on limited activity amid absence of participants — Platts CTI
  • Asian thermal coal market expects demand revival post Lunar New Year
    — Platts CTI
  • SA to invest billions to keep coal plants open — McCloskey
  • Dec thermal coal derivative volumes up 26% on year to 24.2Mt: LEBA — Platts CTI
  • API2: EU coal futures adjusted upward due to elevated natural gas prices
    — i-Energy
  • API4: stability maintained in SA futures for the week — i-Energy
  • Atlantic thermal coal prices supported by possible colder February — Platts CTI
  • Asian thermal coal market weak on cheaper alternatives, upcoming holidays
    — Platts CTI
January 2024
  • Richards Bay market drops again on weak Europe demand — Platts CTI
  • FutureCoal welcomes COP28 paving abated coal pathway — World Coal
  • Pretoria is going back to king coal — Hügo’s Newsletter
  • Atlantic thermal coal prices remain under pressure despite high-CV demand
    — Platts CTI
  • New public-private rail corridor agreement already boding well – RBCT
    — Mining Weekly
  • Richards Bay's coal exports dwindle to early 1990s levels as rail woes mount
    — News24
  • Indian import deals slow, but enquiries continue — McCloskey
  • API2: EU coal futures decline amid slower regional demand — i-Energy
  • API4: SA futures continue to touch the bottom — i-Energy
  • Transportation of coal resumes fully to Richards Bay Coal Terminal — Platts CTI
  • S. Africa's main coal line resumes operations — McCloskey
  • 2023 – The Year The European Renewables Bubble Burst — Forbes
  • Indonesia targets 710Mt coal output in 2024 after record 2023 — Reuters
  • Atlantic thermal coal markets continue to slide despite cold snap — Platts CTI
  • Asian thermal coal sees tight supply; low CV offer-bid gap narrows — Platts CTI
  • Calls growing to bring back reliable coal — Duluth News Tribune
  • Transnet partially restores service on coal export line — Reuters
  • Global coal exports and power generation hit new highs in 2023 — Reuters
  • Asian thermal coal prices rangebound; wide gap between bids, offers — Platts CTI
  • Transnet to reopen main SA coal line on Thu — McCloskey
  • SOUTH KOREA DATA: 2023 coal imports drop 4.5% on year amid overall low demand — Platts CTI
  • No impact so far on South African coal prices from rail closure — Platts CTI
  • Richards Bay prices ease after RBCT rail line closes
    — Southern African Coal Report
  • Minister defends plan to extend life of coal plants
    — Southern African Coal Report
  • RBCT 2023 coal exports drop to decades low of 47Mt
    — Southern African Coal Report
  • Coal financing is still booming – led by China — Bloomberg
  • Atlantic thermal coal prices diverge as cold snap fails to boost pricing — Platts CTI
  • India’s plans to double coal production, ignore climate threat — Bloomberg
  • API2: EU coal futures expand with looming cold snap and red sea conflict
    — i-Energy
  • API4: SA futures stable for a third consecutive week — i-Energy
  • Richards Bay recovers from July low, still below $100/t
    — Southern African Coal Report
  • President grants power minister authority over Eskom
    — Southern African Coal Report
  • New energy plan looks to extend life of coal plants — Southern African Coal Report
  • Atlantic thermal coal prices fall despite cold snap, higher burn — Platts CTI
  • Asian thermal coal market sees lack of bids amid subdued consumer demand
    — Platts CTI
  • Bangladesh's 2023 coal-fired power output tripled, easing shortages — Reuters
  • South Africa’s plan to add 100 gigawatts of new generation capacity — Bloomberg
  • Atlantic thermal coal prices rise in first week of 2024 — Platts CTI
  • Atlantic thermal prices steady after New Year wobble — McCloskey
  • JAPAN DATA: Coal imports fall 8% on year to 13.64Mt in Nov — Platts CTI
  • Asian thermal coal demand tepid despite some inquiries from Chinese buyers
    — Platts CTI
  • Atlantic thermal coal market set for calmer year — Platts CTI
  • Dec thermal coal derivatives volume falls 85% on year to 165,000 t: CME
    — Platts CTI
  • Indian gov’t planning to suspend coal mining for 10 years after 2030 — Sun Media

Headlines from past years



To be announced





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