Coal Market Service thermal trade 2021 outlook to 2050 Report

Commodity Market Report 02 July 2021

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Report summary

The world economic engine has restarted as global vaccination programmes begin to show results. While demand has sprung to life, disrupted supply chains are struggling to catch up and thermal coal is no different. We forecast global thermal coal demand to be 4% higher in 2021 than last year with seaborne trade up 3%. Several factors have disrupted supply this year, such as coronavirus measures, wet weather, mine accidents, licence disputes, protests and strikes. The result? Thermal coal prices are soaring in 2021 to levels not seen in more than a decade. Is this a shift back towards thermal coal or a temporary rise in demand? What about the numerous carbon policies announced by countries over the past year? Is there a long-term future for thermal coal? Please read our report to find out our thoughts and forecast through 2050 for demand, trade, prices and supply.

Near-term risk to our forecast:
Long-term risk to our forecast:
Prices
- Phase 1: Price correction back to marginal costs as supply returns (2021 – 2024)
- Coal-to-gas switching window reopened in South Korea, supporting anti-coal policy implementation
- Australia high ash discount remains wide amid China’s coal ban
- Phase 2: Price recovers as overcapacity pressure declines with requirement for highly probably projects (2025 – 2027)
- Phase 3: Incentive projects needed as operating capacity fall accelerates (2028 – 2032)
- Phase 4: Prices peak as riskier possible projects get incentivised. (2033 – 2044)
- Phase 5: Accelerated energy transition amid emission targets weigh on prices (2045 – 2050)
- Global thermal coal demand peaks in 2025
- Seaborne demand driven by government policies in key Asian nations
- China
- India
- Japan, South Korea, and Taiwan (JKT)
- Japan
- South Korea
- Taiwan
- Southeast Asia
- EMEARC and the Americas
- China coal ban and supply shortages upend trade flows
- Country-level supply review:
- Australia
- Indonesia
- Colombia
- US

Tables and charts

This report includes 25 images and tables including:

Phase 1 marker coal price forecast, real 2021 US$/t
Supply gap vs FOB Newcastle market price (Mt, US$/t)
South Korea coal-to-gas switching incentives

Japan coal-to-gas switching incentives
FOB Newcastle HA vs other seaborne prices, energy-adjusted (%)
NEWC HA FOB delivered to South China vs CFR China HA
Phase 2 marker coal price forecast, real 2021 US$/t
Supply gap vs FOB Newcastle market price (Mt, US$/t)
Benchmark thermal coal seaborne export incentive prices
Phase 3 marker coal price forecast, real 2021 US$/t
Thermal coal price forecast, FOB (US$/t, real 2021)
Thermal coal price forecast, delivered (US$/t, real 2021)
Phase 4 marker coal price forecast, real 2021 US$/t
Phase 5 marker coal price forecast, real 2021 US$/t
Global thermal coal demand for power
Global thermal coal demand for non-power
Seaborne thermal coal demand by region
Seaborne thermal coal demand cumulative change by region from 2020
Japan’s 2030 generation share target vs WM forecast
South Korea’s 9th Basic plan 2030 targets vs WM forecast
Taiwan’s 2025 generation share target vs WM forecast
2021 FOB total cash plus sustaining capex cost curve, adjusted to benchmark 6322gar quality
2050 FOB total cash plus sustaining capex cost curve, adjusted to benchmark 6322gar quality
Seaborne thermal coal supply by country
Change by country 2021-2050