Is coal trade entering a turning point?

Summary

Global coal consumption hit a record 8.79 billion tonnes in 2024. The IEA’s Coal Mid‑Year Update 2025 indicates consumption should plateau in 2025 and may start to fall in 2026. China and India showed weaker first‑half 2025 demand as renewables and efficiency gains take share, while the US and parts of the EU saw higher coal use driven by gas prices and lower renewable/hydro output. At the same time, global coal production is forecast to expand (projected >9.2 billion tonnes in 2025), creating an oversupply risk that could push prices and seaborne trade lower. Forecasts point to a contraction in global coal trade in 2025 and again in 2026 — potentially the first consecutive two‑year decline in seaborne coal trade this century, with material implications for freight markets and vessel employment.

Key Points

2024 global coal demand reached a record 8.79 billion tonnes; 2025 is expected to plateau.
China’s coal demand fell around 0.5% in H1 2025; coal‑fired power generation down ~3% in H1.
India’s power‑sector demand dipped in H1 but the IEA still forecasts modest growth for 2025; New Delhi plans substantial domestic production expansion through 2030.
The US bucked the trend with a ~12% rise in coal demand in H1 2025 and projected full‑year growth driven by high gas prices.
Production growth (led by China, India and Indonesia) could outpace flat demand, pressuring prices and trade flows.
Seaborne coal trade is forecast to contract in 2025 and 2026 — a potential turning point for dry‑bulk freight.
Indonesia dramatically expanded output and briefly enforced a benchmark (HBA) pricing rule before rescinding it; taxes/royalties remain tied to HBA, leaving miners exposed to price spreads.
India’s coking coal demand (for steel) is set to rise sharply to 2030, and trade flows are shifting — Russia and Australia are regaining share in Indian imports.

Content Summary

The write‑up aggregates IEA analysis and market data to argue that coal’s recent record is meeting countervailing forces. Renewables growth and efficiency gains are starting to dent demand in major markets, while production is still expanding in key suppliers. This mismatch is expected to reduce seaborne trade volumes over the next two years, a development that could alter freight rates, chartering patterns and vessel employment. Policy moves — notably Indonesia’s short‑lived benchmark pricing and India’s push to raise domestic production while growing steel demand — are already reshaping trade routes and supplier mixes.

Context and Relevance

This is important for shipping firms, dry‑bulk operators, port planners and commodity strategists. Coal remains a large cargo by volume; a sustained drop in seaborne coal trade reduces tonne‑mile demand, puts downward pressure on bulk freight rates and can leave ships and charterers scrambling for alternative employment. The article also flags how policy settings and shifting supplier relationships (e.g. more Russian coal to India) can rapidly change trade patterns.

Why should I read this?

Short and blunt: if you work in shipping, commodities, ports or energy — pay attention. This could change cargo volumes, routes and charter rates. We’ve done the sift for you: the piece flags where demand, supply and policy are colliding, and why that might mean a meaningful shift for dry‑bulk markets.

Source

Source: https://www.hellenicshippingnews.com/is-coal-trade-entering-a-turning-point/