Commodity Market Report
Global thermal coal long-term outlook H1 2020: Coronavirus results in a fundamental shift
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
-
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)
-
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
-
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 24 images and tables including:
- 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
- ARA vs TTF gas price forecast (real 2020)
- Japan and South Korea coal-to-gas switching bands
- Calculation of China domestic FOB prices netback to Newcastle benchmark
- Newcastle price vs percentile costs, 6,322 kcal GAR
- Indonesia price vs percentile costs, 4,200 kcal GAR
- Phase 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
- Benchmark thermal coal seaborne export incentive prices
- Seaborne demand vs supply status
- Thermal coal price forecast
- Phase III marker coal price forecast (real 2020, US$/t)
- Phase IV marker coal price forecast (real 2020, US$/t)
- Japan’s 2030 generation share target vs WM forecast
- South Korea’s 9th Basic plan 2034 targets vs WM forecast
- Taiwan’s 2025 generation share target vs WM forecast
- Seaborne export cost curve 2020 (energy adjusted)
- Seaborne export cost curve 2040 (energy adjusted)
- Seaborne thermal coal supply by country
- Thermal seaborne exports change by country (2020-2040)
What's included
This report contains:
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