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
- 15 more item(s)...