Commodity Market Report
Global thermal coal long-term outlook H2 2019: Coal's future diminishing under the allure of economic renewables
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Report summary
The thermal coal market continues to be volatile as various governments around the world implement policies both for and against coal. The Americas and Europe push towards a less carbon intensive future building out renewables and burning natural gas at record levels as they shift from coal. Many of these countries have set deadlines to be “free of coal” and, in some cases, are even moving these deadlines forward. However, in Asia, coal is being embraced as the fuel of economic growth, particularly in India, China and Southeast Asia. These countries are pursuing what was once called the “American Dream” – a middle class built on the wealth generated from manufacturing. They have neither the extensive electric transmission grids nor the gas infrastructure of more developed countries. This often leaves coal as the fuel of choice due to its reliability, low fuel cost, and ability to be placed near demand centres. At least…for now.
Table of contents
- Phase 1: Gas price weakness weighs coal prices (2019 – 2020)
- Phase 2: Recovery to distressed marginal costs (2021 – 2025)
- Phase 3: Higher prices required to incentivise projects (2026 – 2033)
- Phase 4: renewables and project approval risks weigh on prices (2034 – 2040)
- Global thermal coal demand may not have peaked yet
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Seaborne demand is influenced by government policies in key Asian nations
- China
- India
- Japan, South Korea, and Taiwan
- Southeast Asia
- EMEARC and the Americas
- Oversupply continues despite record levels of demand
- Mining costs likely to decrease
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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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Calculation of Chinese domestic FOB prices netback to Newcastle benchmark (real 2019, US$/t)Phase 1 marker coal price forecast (real 2019, US$/t)ARA vs TTF gas price forecast (real 2019)
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North Asia coal-gas switching incentivesPhase II marker coal price forecast (real 2019, US$/t)Supply gap vs FOB NewcastleQuality adjusted costs vs FOB NewcastleSeaborne demand vs supply statusSeaborne thermal export incentive pricesPhase III marker coal price forecast (real 2019, US$/t)Thermal coal price forecast, FOBThermal coal price forecast, CFR
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What's included
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