Global Coal Markets At A Crossroads

   According to the World Bank's recently released October 2025 "Commodity Markets Outlook" report, the report states that "Global Coal Markets at a Crossroads With Soft Demand, Resilient Supply, and a Power Sector in Transition."

   In the third quarter of 2025, the price of Australian coal increased by $6 per ton compared to the previous quarter, representing a 6% increase on a year-over-year basis. The increase in coal prices in the third quarter of 2025 was mainly due to the strong demand driven by multiple heatwaves in Asia, as well as lower coal exports from Australia and Indonesia. Recent data shows that due to abnormal temperatures in China, demand has increased further, and prices are expected to rise further.

  In the first half of 2025, global coal demand decreased by about 1% year-on-year. The changes in demand in the main consumer regions reflect the differences in renewable energy generation and electricity demand. In China and India, coal power generation has decreased due to reduced electricity consumption and increased production of renewable energy. On the contrary, U.S. coal consumption increased in the first half of 2025, due to a surge in electricity demand and rising natural gas prices.

   Global coal consumption is expected to remain generally stable in 2026 and 2027. Although the increased electricity consumption from electric vehicles, air conditioning, and data centers has led to a rise in power demand, the increase in renewable energy generation will put pressure on coal demand. Among the major coal-consuming countries, coal demand is expected to increase only in China and India in 2026 and 2027, which will offset the decline in consumption in the EU and the United States.

  In the first half of this year, global coal supply continued to grow, mainly due to increased production in China and the United States. In the first six months, China's coal production recovered from a period of reduced output to a 6% year-on-year increase, while U.S. coal production increased by 8%.

   Unfavorable weather disrupted production in Australia and Indonesia, two major exporting countries, in the first half of the year, and the latter was also affected by mining accidents, which further increased price pressure, especially in the third quarter of 2025. India's production remained stable, while Russia's production declined, reflecting international sanctions and the financial pressures faced by the industry.

   Global coal production is expected to decline in 2026, with India being the only major producer where coal supply is expected to increase. International coal trade is expected to decline slightly in 2026, consistent with the downward trend in Asian imports. This will reduce the export volumes of Australia and Indonesia, the two major exporting countries, and lead to further price declines.

   It is expected that Australian coal prices will decrease by 21% in 2025 compared to the previous year, and may face downward pressure in 2026, before rebounding in 2027. Overall, the risks to coal prices remain balanced.

From： www.cwestc.com

Editor： Xu Xi