Commodity Market Report
Global thermal coal long-term outlook H1 2020: Coronavirus results in a fundamental shift
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Demand in 2020 has plummeted alongside economies as countries went into lockdown. The recovery has begun in parts of the world and will accelerate into the second half of the year, but “normal” as we knew it will never return. The market will grow over the next few years as global economies emerge from the crisis, but seaborne trade will not reach the 1.0 billion tonne mark again. Government policy is now determining the future of thermal coal and the world continues to diverge in the near-term. Europe and the Americas will accelerate their energy transitions using stimulus packages to grow the renewables sectors. Much of Asia is a different story though with the major importing countries, China and India, investing further into coal.
Table of contents
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Prices reach new lows as coronavirus destroys demand
- Phase 1: Recovery to marginal costs (2020 – 2024)
- Gas price recovery
- China's domestic coal prices provide support to seaborne prices
- Prices below 50th or 75th percentile costs are unsustainable
- Phase 2: Higher prices required to incentivise projects (2025 – 2029)
- Phase 3: Possible (riskier) project requirement provides buffer to fast demand decline (2030 – 2034)
- Phase 4: renewables and project approval risks weigh on prices (2035 – 2040)
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Global thermal coal demand growth continues through 2027
- Seaborne demand is influenced by government policies in key Asian nations
- China
- India
- Japan, South Korea, and Taiwan
- Southeast Asia
- EMEARC and the Americas
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Producers grappling with requirement for supply cuts
- Mining costs likely to continue to decrease
- Country-level supply review: a decline in Indonesian supply provides upside for Australia and Russia
- Australia
- Indonesia
- Colombia
- Russia
- USA
Tables and charts
This report includes the following images and tables:
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Global thermal coal demand for powerGlobal thermal coal demand for non-powerSeaborne thermal coal demand by region
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Seaborne thermal coal demand cumulative change by regionARA vs TTF gas price forecast (real 2020)Japan and South Korea coal-to-gas switching bandsCalculation of China domestic FOB prices netback to Newcastle benchmarkNewcastle price vs percentile costs, 6,322 kcal GARIndonesia price vs percentile costs, 4,200 kcal GARPhase I marker coal price forecast (real 2020, US$/t)Phase II marker coal price forecast (real 2020, US$/t)Supply gap vs FOB Newcastle market price
- 12 more item(s)...
What's included
This report contains:
