Commodity market report
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14 Pages

Global thermal coal long-term outlook H1 2016

Global thermal coal long-term outlook H1 2016

Report summary

The seaborne thermal coal market is set to contract for the second successive year. Further downside is not expected though. Costs have swung much lower, with tailwinds of FX support and oil price assistance allied to production efficiencies and steep cuts in labour/other variable costs (where possible). Thermal coal is still a highly competitive source for electricity generation in sizeable markets that matter for thermal trade. The losses have mainly come from outward policy (China, India) but also in smaller markets where carbon price support cut into the cost advantage coal has long had (the UK). The seaborne market does eventually grow, but not back above 2014 levels until the early 2020 timeframe. The only newer supply projects of note come from the Galilee Basin in Australia, but even they are fraught with uncertainty (financial, environmental, risk appetite). 

What's included?

This report includes 3 file(s)

  • Global thermal coal long-term outlook H1 2016 PDF - 876.30 KB 14 Pages, 0 Tables, 16 Figures
  • CMS Thermal Coal Prices data May VF.xls XLS - 2.26 MB
  • WM CMS Thermal Slidepack May 2016 VF.pdf PDF - 2.74 MB


Global coal markets are facing extraordinary challenges and uncertainties. Factors such as global overcapacity, weakening demand and falling prices have created cautious investors. These factors have caused delays and cancellations of many mine and infrastructure projects, as well as lower growth rates at others.

This Thermal Coal Market Long Term Outlook report gives global and regional coal producers, consumers, transporters and investors detailed supply, demand and price forecasts for the coal industry, covering all the key domestic markets in North America, China and India.

Use this report to gain a better understanding of market dynamics, including revenue and demand potential for different coals. It will also help you identify trade patterns and changes affecting the thermal coal markets.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets. Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future investments.

From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
    • Thermal coal prices past the bottom: low US$40/t range for bituminous coals in early 2016
    • Global economic growth: downgraded, leads to much lower thermal coal growth, particularly in China where coal has peaked
    • Chinese coal supply, demand and imports have all peaked
    • Demand for thermal coal is waning as the world adjusts to post-COP21 NDC commitments

In this report there are 16 tables or charts, including:

  • Executive summary
    • Thermal spot price versus 90th percentile cost
    • 90-100% decile of export production (83 Mt)
    • Regional contribution to global GDP growth
    • Revision in global GDP since H2 2015 outlook
    • Global thermal coal demand for power (Mt)
    • Global thermal coal demand for non-power (Mt)
    • Seaborne thermal trade H1 2016 vs H2 2015 (Mt)
    • Coal plant efficiency and emission level by boiler technology
    • Change in seaborne high rank thermal coal supply by period and country (Mt); 644 Mt in 2016
    • Change in seaborne low rank thermal coal supply by period and country (Mt); 237 Mt in 2016
    • Seaborne export cost curves 2016 (energy adjusted)
    • Seaborne export cost curves 2035 (energy adjusted)
    • Working through global overcapacity (Mt)
    • Price forecasts 2016-2022
    • New Australian projects required from 2023
    • Price forecasts 2016-2035
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