Global Thermal Coal Strategic Planning Outlook – H1 2022

The Russia-Ukraine war has shocked the coal and the broader energy markets. The war threatens to radically upend long-term traditional seaborne trade flows and upset the very tight balance in the high calorific value coal market. Buyers in Europe, Japan, South Korea, and several other locations are scrambling to minimise their exposure to Russian supply. In the short-term, supply shortages will keep prices elevated well above marginal costs for longer. Europe will increase coal consumption, due to more prominent shortages in European natural gas markets; while there is coal import demand destruction most elsewhere, as the rest of the world retreats from high coal prices. Longer-term, faster decarbonization and protectionist policies will bring about lower seaborne coal demand than our previous forecast, falling 48% to 512 Mtpa by the end of the forecast.