Coal use in India and other Asian countries is expected to offset declining demand from Europe, the US and China over the next five years, leaving total global coal demand nearly flat, the International Energy Agency said in its annual coal market report Monday.
"As a result of these contrasting trends, global coal demand reaches 5.537 billion mt in 2022, which is only marginally higher than current levels, meaning that coal use all but stagnates for around a decade," the IEA said.
Stronger consumption this year in China, the US and India is expected to be reversed over the long term in China and the US as those countries push toward cheaper and more abundant natural gas and renewables.
In India, the trend is towards more coal use as the country seeks economic growth, with coal-fired generation expected to increase at nearly 4%/year through 2022, the IEA said.
However, China's future policy and economic circumstances will continue to influence the direction of the market, which, combined with supply disruptions, can result in price volatility.
Coal demand in China is forecast to decline, although coal supplies will be over 55% of the country's energy demand in 2022.
As well as that, prices could be driven by rising demand for coal in Indonesia and higher export costs, resulting in a 2.1% decline/year in thermal coal exports, from 294 million mt in 2016 to 258 million mt by 2022.
In Europe, with many countries making policy commitment to phasing out coal use, consumption is projected to decline by 1.6%/year to 281 million mt in 2022.
Demand is forecast to be stable through 2022 in Poland, while consumption decline in Germany could be accelerated by policy changes.
Russia, Colombia and South Africa are expected to increase their coal exports marginally, with Australia remaining the largest coal exporter in the next five years.
US coal exports are forecast to remain constant in 2022 as the country remains a swing supplier.
