Commodity Market Report

Global thermal coal long-term outlook H2 2017: Charting a path through adversity

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08 December 2017

Global thermal coal long-term outlook H2 2017: Charting a path through adversity

Report summary

Thermal coal markets are in structural decline and consumption has already peaked, though seaborne imports will still show some long-term growth. A transition is well underway to a world that consumes coal intelligently and produces more efficiently, emphasizes renewables, and uses more gas. Yet there are major technical hurdles to reaching this brave, new, "renewable" world. Accordingly, coal consumption will remain substantial for years to come.

Table of contents

  • Executive summary
    • Phase I: a slow slide to marginal costs (2017 – 2021)
    • Global thermal coal demand peaked in 2013 and is unlikely to change course
    • Seaborne demand is driven government policies in key Asian nations
      • China
      • India
      • Japan, South Korea, and Taiwan
      • Southeast Asia
      • Europe and the Americas
    • Variable import demand requires flexible supply: overcapacity is here to stay
    • Mining costs slowly rising
    • Country-level supply review: Indonesia and Australia dominate the supply
    • Global port loading capacity adequate until 2027, then new regional capacity needed
    • Dry bulk seaborne trade growth will flatten for five years threatening the recovery in ocean freight rates
  • Risks and uncertainties

Tables and charts

This report includes 20 images and tables including:

  • Phase I marker coal price forecast, real 2017 US$/t
  • Seaborne demand versus supply status, Mt
  • Supply gap versus FOB Newcastle market price (Mt, US$/t)
  • Phase II marker coal price forecast, real 2017 US$/t
  • Phase III marker coal price forecast, real 2017 US$/t
  • Phase IV marker coal price forecast, real 2017 US$/t
  • High low price ranges: FOB Newcastle
  • High low price ranges: CFR ARA
  • Thermal coal price forecast, FOB (US$/t, real 2017)
  • Thermal coal price forecast, delivered (US$/t, real 2017)
  • Global thermal coal demand for power (Mt)
  • Global thermal coal demand for non-power (Mt)
  • Seaborne thermal coal demand by region (Mt)
  • Seaborne thermal coal demand change by region (Mt)
  • Seaborne export cost curve 2017 (energy adjusted)
  • Seaborne export cost curve 2035 (energy adjusted)
  • Seaborne thermal coal supply by country (Mt)
  • Cumulative change in seaborne thermal coal supply by year from 2017 levels (Mt)
  • Dry bulk Seaborne trade (Mt)
  • Ocean freight rate cost assumptions for main ocean freight routes (US$/t)

What's included

This report contains:

  • Document

    Global thermal coal long-term outlook H2 2017.pdf

    PDF 4.58 MB

  • Document

    cms thermal coal prices data 2017H2.xls

    XLS 3.65 MB

  • Document

    Global thermal coal long-term outlook H2 2017: Charting a path through adversity

    PDF 532.21 KB