Our analysis of global coal supply indicates that the strain on producers is set to continue. Global production fell in 2015 with lower output from China and the United States. In 2015 we estimate that average cash costs for seaborne export thermal coal declined - year on year - by 19% to US$45/tonne and 21% to US$75/tonne for seaborne export metallurgical coal. Margins were still very thin in 2015 despite falling costs. We expect average thermal coal margins to fall from US$9/tonne to US$2/tonne in 2016, and metallurgical margins from US$15/tonne to US$7/tonne.