Author: Vlastimil Vilímek | Prague on 06.11.2023

Demand was expected to grow by 1.5% in the first half of 2023, while the second half of the year is expected to see a decline, reversing the gains made in the first half.

Total demand in the energy sector will be 0.4% lower at around 5 597 million tonnes.

Continued growth is expected in the non-energy sector, reaching 2 791 million tonnes.

Markets in 2023 have returned to more recognizable patterns after three odd years (2020 – Covid-19, 2021 – post-pandemic recovery, 2022 – global energy crisis following the Russian invasion of Ukraine).

Demand declines in the United States and the European Union are driven by the energy sector, weak electricity demand, and the expansion of renewables.

In the US, coal production is expected to fall by 4,2 % to 519 million tonnes, despite a slight increase of 0,8 % in the first half of the year.

In the European Union, coal production fell by 17% in the first six months due to falling demand in the energy sector.

The overall decline in EU production is estimated at 8% to 321 million tonnes.

In the European Union, coal demand is expected to fall by around 17% to around 372 million tonnes.

The European Union temporarily became an exporter of thermal coal in the first half of 2023 due to large stocks and a reduction in coal-fired power generation.

China and India increased coal imports in 2023, with China ending an unofficial ban on coal imports from Australia.

Demand in China and India grew by around 5.5% in the first half of 2023.

Most of the increased global demand for thermal coal imports is expected to be met by Indonesian exports, which are expected to grow by 12% to 525 million tonnes.

Increased metallurgical coal demand is expected to be met by additional exports from Mongolia, which will more than double to over 40 million tonnes.

South Africa’s coal production will fall by 4.2% to 220 million tonnes, due to a drop in demand caused by the unavailability of coal-fired power stations and infrastructure problems.

In Australia, coal production is expected to increase by 2% to 460 million tonnes, thanks to favourable weather conditions that allow producers to expand production after being hit hard by the La Niña phenomenon in the previous year.

Coal production in Russia is set to decline slightly by 2.9% to 429 million tonnes in the first six months of 2023, after rising by 1.4% in the first six months of the year.

However, forecasts for Russia are difficult due to the current war situation.

Forecast for 2024:

Global coal demand is expected to remain stable at around 8.38 billion tonnes, a level reached in 2022.

We see a possible slight decline of around 1% in electricity generation. This decline is due to the strong expansion of electricity generation from renewable sources and only a slight increase in electricity demand.

On the other hand, in the industrial sector, we expect a slight increase of around 1.5%. This increase is due to improving economic conditions.

Coal demand is also on the wane in other advanced economies such as Japan, Korea, Australia, and Canada.

China, and India and Southeast Asia will grow, offsetting declines in the US and EU.

China will continue to account for more than half of global coal consumption, with the power sector alone consuming one-third.

If India is added, their share rises to around 70%, meaning that both countries consume twice as much coal as the rest of the world combined.

With the recent growth in Southeast Asia, the dominance of the Asian continent continues to increase.

By 2024, the share of China, India, and the ASEAN region is expected to reach 76%.

The United States and the European Union are projected to achieve a share of coal consumption falling from 40% three decades ago to 8% in 2024.

Key Ideas:

1. Total coal demand in 2023 is expected to be at the same level as in previous years, i.e. around 8.388 billion tonnes.
2. Increases in demand in China, India, and Indonesia offset declines in the United States, the European Union, and Japan.
3. The declines in demand in the US and EU are due to the energy sector, weak electricity demand, and the expansion of renewables.
4. Demand in China and India grew by 5.5% in the first half of 2023.
5. Forecasts for 2024 show global demand remaining stable, with a decrease in the electricity sector and a slight increase in the industrial sector.
6. China, and India will continue to dominate global coal consumption, with the two countries together consuming twice as much coal as the rest of the world.

Let’s wait a little longer for the specific numbers, as 2023 is not over yet.

Contact