Global thermal coal long-term outlook H2 2019: Coal's future diminishing under the allure of economic renewables Report

Commodity Market Report 16 December 2019

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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.

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
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
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 21 images and tables including:

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)

North Asia coal-gas switching incentives
Phase II marker coal price forecast (real 2019, US$/t)
Supply gap vs FOB Newcastle
Quality adjusted costs vs FOB Newcastle
Seaborne demand vs supply status
Seaborne thermal export incentive prices
Phase III marker coal price forecast (real 2019, US$/t)
Thermal coal price forecast, FOB
Thermal coal price forecast, CFR
Phase IV marker coal price forecast (real 2019, US$/t)
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
Seaborne export cost curve 2019
Seaborne export cost curve 2040
Seaborne thermal coal supply by country
Change in seaborne thermal exports 2019-2040

What's included

This report contains:

wm_cms_thermal_h2_2019_lto_slidepack.pdf

PDF 1.77 MB
CMS_data_thermal_trade_long_term_outlook_2019_H2.xlsx

XLSX 15.43 MB
CMS_data-pivot_view-thermal_trade_long_term_outlook_2019_H2.xlsx

XLSX 2.58 MB

cms_price_charts_thermal_trade_long-term_2019_H2_data.xls

XLS 3.90 MB
Global thermal coal long-term outlook H2 2019: Coal's future diminishing under the allure of economic renewables

PDF 1.02 MB
Global thermal coal long-term outlook H2 2019: Coal's future diminishing under the allure of economic renewables

ZIP 16.28 MB