Recently, the International Energy Agency released the “Coal 2024” report (hereinafter referred to as the “Report”), pointing out that this year, global coal consumption, production and trade volume have all hit record highs. Against the backdrop of a continued surge in global electricity demand, as the installed capacity of renewable energy power generation continues to increase, global coal consumption will stabilize and is expected to peak by 2027. However, in the short term, factors such as extreme weather events and coal consumption trends in emerging economies will have a significant impact on the coal demand side; in the medium term, the growth rate and increase of global electricity demand will be an important factor affecting coal consumption.
This year, both consumption and production hit record highs
The report pointed out that coal demand in 2024 will increase by 1% from 2023 to a record 8.77 billion tons. Compared with previous years, the growth rate of coal demand has slowed significantly, increasing by 7.7% in 2021, 4.7% in 2022, and 2.4% in 2023.
Despite the increase in industrial consumption, the power sector has been the main driver of coal demand growth, and the report predicts that coal-fired power generation will reach an all-time high of 10,700 terawatt hours in 2024. British energy think tank Ember said that emissions related to coal power generation will rise to a record high in 2024.
Globally, driven by factors such as the electrification of transportation, rising demand for heating and cooling, and a surge in electricity consumption in data centers, electricity demand is growing at a strong pace. It is worth noting that extreme weather may cause fluctuations in coal consumption in the short term, mainly because “wind and light” energy depends on weather.
The International Energy Agency pointed out that coal’s share in the global power structure has now dropped to a minimum of 35%. “The rapid deployment of clean energy technologies is reshaping the global power sector,” said Keisuke Sadamori, head of the International Energy Agency’s Energy Markets and Security Department. “Despite a sharp increase in electricity consumption, global coal demand will remain at current levels from now to 2027 as the energy structure continues to change.”
The report pointed out that in 2024, coal production will also reach an all-time high, exceeding 9 billion tons for the first time. Coal production in Asian countries such as India and Indonesia has set new records. Among them, India’s coal production in 2024 increased by more than 7%, and Indonesia’s coal production in 2024 exceeded 800 million tons for the first time. It is expected that by 2027, Australia will surpass the United States and Russia to become the world’s fourth largest coal producer.
Uneven consumption in different regions
The report points out that coal consumption in different regions of the world is uneven. In most developed economies, coal demand has peaked and is expected to continue to decline before 2027, and the rate of decline will depend on whether strong policies are implemented and implemented. Among them, the decline in coal demand in the EU and the United States has slowed down significantly. Compared with 23% and 17% in 2023, the EU and the United States have fallen by 12% and 5% this year respectively; by 2027, EU coal demand is expected to decrease by 68 million tons. The report predicts that in the next few years, the surge in electricity demand may further slow the decline in coal demand in the United States and Europe.
At the same time, coal demand is still growing in some emerging economies, such as India, Indonesia and Vietnam, where electricity demand is rising rapidly with rapid economic and population growth.
The report points out that India’s coal consumption in 2024 is expected to increase by more than 5% year-on-year to a record 1.3 billion tons, exceeding the total of the EU and the United States. From now to 2027, India’s coal demand will increase the most, by more than 100 million tons.
It is reported that India’s coal production continues to grow under the stimulus of strong coal demand and the government’s reduction in imports. At present, the Indian government strongly encourages Indian Coal Company and private producers to increase coal production. According to statistics from the Indian Ministry of Coal, from January to August 2024, India’s total coal production totaled 728.7 million tons, an increase of 8.6% over the same period last year.
Global trade volume recovers steadily
The report points out that in 2024, the international trade volume of coal is expected to reach a record 1.55 billion tons, and the incremental and total volume of coal trade in all categories, such as seaborne thermal coal and seaborne coking coal, will set new records. The Asia-Pacific region remains the center of international coal trade, with India, Japan, South Korea and Vietnam being the main coal importers, and Indonesia and Australia being the main coal exporters. Looking ahead, global coal trade volume is expected to decrease, with thermal coal trade volume experiencing the largest decline.
The International Energy Agency believes that coal prices are currently 50% higher than the average price between 2017 and 2019. As of November 2024, the price of imported thermal coal in Europe is about US$120 per ton, while the average price between 2017 and 2019 was US$80 per ton; the price of Australian thermal coal is about US$140 per ton, while the average price in 2020 was US$90 per ton.
Since the beginning of this year, the global coal trade has shown a clear growth trend. Kepler, a global shipping data analysis company, pointed out that from January to November 2024, global thermal coal exports increased by 9 million tons compared with the same period last year. As the world’s largest coal exporter, Indonesia’s coal exports exceeded 500 million tons for the first time this year.
AXS Marine, a ship tracking and data service company, pointed out that global coal trade has continued to grow in the past three years and has now fully recovered to pre-epidemic levels. From January to October 2024, the total loading volume of international seaborne coal trade (excluding domestic coastal transportation) was 1.1324 billion tons, an increase of 2.3% over the same period last year.
From the perspective of the world’s major coal exporting countries, from January to October 2024, Indonesia exported 438.5 million tons of coal, a year-on-year increase of 7.9%; Australia exported 291.6 million tons, a year-on-year increase of 3.4%; Russia exported 137.2 million tons, a year-on-year decrease of 13.4%; the United States exported 75 million tons, a year-on-year increase of 5.0%; South Africa exported 49.9 million tons, basically the same year-on-year; Colombia exported 47.6 million tons, a year-on-year increase of 2.7%; Canada exported 41.1 million tons, a slight increase of 0.2% year-on-year; Mozambique exported 17.7 million tons, a year-on-year decrease of 11.1%.
According to the latest report from Reuters, in the first 11 months of 2024, the export volume of thermal coal by US coal traders hit a six-year high, and the export volume of US thermal coal is expected to rise further in 2025. During this period, the United States has exported more than one million tons of coal to 8 different countries. India is the largest destination for US coal exports in 2024, accounting for 29% of the total US thermal coal exports.
