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"In the past three years, global coal production, consumption and trade have increased, and prices have fluctuated dramatically. It is expected that global coal production, consumption and trade will continue to increase in 2024, but the supply and demand structure and circulation pattern are changing. Recently, when talking about the international coal market in recent years and what new characteristics will be presented this year, Liang Dunshi, vice chairman of the China Coal Economic Research Association, said.
In the past three years, global coal production, consumption and trade have all increased
Liang Dunshi pointed out that the International Energy Agency (IEA) report shows that in 2020, affected by the global spread of the new crown pneumonia epidemic, the world's coal consumption demand fell sharply, and the global coal demand fell by 4.4% year-on-year, the largest decline since World War II. In 2021, with the gradual recovery of the economy, world coal consumption demand rebounded sharply, with a year-on-year increase of 6%. In 2022, global coal consumption reached 8.415 billion tons, a year-on-year increase of 4.0%, the highest level in history. At the end of 2023, the International Energy Agency reported that global coal demand will increase further in 2023, reaching about 8.536 billion tons, a year-on-year increase of 1.4%, a record high.
In terms of output, Liang Dunshi pointed out that in 2020, the report released by the International Energy Agency showed that the world's coal production also declined across the board, down 4.8% year-on-year, also affected by the spread of the epidemic. In 2021, global coal production increased by 3.9% year-on-year to 7.888 billion tons. In 2022, world coal production increased sharply by 7.0% year-on-year to 8.582 billion tons. The International Energy Agency's Coal Market Report 2023 predicts that global coal production in 2023 will increase by 1.8% from 2022 to a record 8.741 billion tonnes.
In terms of trade volume, Liang Dunshi said that according to the International Energy Agency, in 2019, the global coal trade volume was 1.436 billion tons, the highest level in the phase. In 2020, due to the impact of the epidemic, global coal trade fell to 1.296 billion tons, down 10.4% from the previous year. In 2021, international coal trade reached 1.333 billion tons, an increase of 1.6% over the previous year. In 2022, international coal trade volume was 1.376 billion tons, an increase of 1.0% over the previous year. At the end of 2023, the agency estimated that global coal trade in 2023 exceeded the pre-pandemic level of 2019 to reach 1.466 billion tons, a year-on-year increase of 6.5% and a record high.
In the past three years, the world's major coal price indices have oscillated violently
Different from the above three aspects of relatively stable growth, Liang Dunshi pointed out that in the past three years, whether it is thermal coal or coking coal, the world's major coal price indices have fluctuated violently, and even soared and plummeted.
The FOB price of 6,000 kcal thermal coal in the three ports of the European ARA (Amsterdam, Rotterdam and Antwerp in the Netherlands) fell to US$37.8 per tonne in May 2020, below the trough of US$43.08 per tonne in the previous cycle, rose to US$266.2 per tonne on October 15, 2021, and skyrocketed to US$407.5 per tonne on July 1, 2022, before volatility declined, and the price is basically between US$100 and US$150 per tonne in 2023. On April 5 this year, the arrival price of 6,000 kcal thermal coal in the three ports of the European ARA was US$119.4 per tonne.
The FOB price of 6,000 kcal thermal coal in Port Richard, South Africa, fell to US$44.58 per tonne in April 2020, rose to US$242.22 per tonne in October 2021, and rose to US$370 per tonne in July 2022 before retreating. On April 5 this year, the FOB price of 6,000 kcal thermal coal in Port Richard, South Africa, was $102.93 per tonne.
The CIF price of 6,000 kcal thermal coal at the Port of Newcastle fell to US$47.99 per tonne on August 28, 2020, basically close to the trough of US$47.37 per tonne seen in the previous cycle in January 2016, rising to US$253.55 per tonne in October 2021 and soaring to US$452.8 per tonne on September 9, 2022. On April 5 this year, the FOB price of 6,000 kcal thermal coal at the Port of Newcastle was $128.24 per tonne.
Coking coal prices have skyrocketed and plummeted. The closing price of high-quality coking coal at the Cape Harbor Mine in Queensland, Australia, fell below US$100 per tonne to US$97.25 per tonne in November 2020. It rose to US$408.0 per tonne in October 2021 and skyrocketed to US$670 per tonne on March 18, 2022, before falling rapidly to US$198.0 per tonne in August before recovering to US$385 per tonne in February 2023. On April 5 this year, the FOB price of high-quality coking coal at the Cape Harbor Peak View Mine in Queensland, Australia, was US$223.5 per tonne.
The global coal consumption level will remain at a high level for a long time to come
On December 15, 2023, the International Energy Agency (IEA) released the Coal Market Report 2023. The report predicts that from 2024 to 2026, world coal production, international trade volumes will decline, and coal demand will also show a downward trend, but the growth of coal demand in India and ASEAN will offset the decline in demand in the European Union and the United States.
According to a report by CNBC on April 10, in the first quarter of 2024, coal prices in the international market were basically the same as the same period last year.
Liang Dunshi predicts that looking forward to the long term in the future, the overall global coal consumption level may remain basically stable and continue to be at a high level.
Liang Dunshi believes that on the whole, the international coal market will show the following characteristics in the future: First, the global coal consumption demand will continue to grow slightly, but the trend of polarization will further intensify. On the one hand, demand from developed Western countries such as Europe and the United States will continue to decline, and on the other hand, demand from other parts of South Asia, Southeast Asia, and developing countries will continue to grow. Second, the trend of continued growth of world coal production remains unchanged, but the concentration has increased, and it is more concentrated in major coal-producing countries. Third, the trend of continuous expansion of international coal trade remains unchanged, but due to geopolitics, changes in production and demand and trade policy adjustments, the global coal circulation pattern will be further and profoundly reshaped. Fourth, the trend of coal costs driving prices to continue to rise remains unchanged. In 2023, after continuous adjustment, international coal prices have gradually fallen back from the excessively high prices caused by unexpected factors such as the epidemic and the Russia-Ukraine conflict to the increasingly normal level of supply and demand fundamentals. Fifth, the global trend of climate change, green and low-carbon development, and clean energy transformation remains unchanged, but different countries and regions pay more attention to the balance between economic development, environmental protection and energy security in terms of strategy.
Domestically, Liang Dunshi predicts that in 2024, with the steady development of the mainland economy, domestic coal consumption demand will continue to grow slightly. However, in the new year, the space for the growth of domestic coal production and imports may be further narrowed, and there is great uncertainty. At the same time, domestic coal stocks are relatively abundant, and hydropower may also return to normal. Overall, domestic coal supply and demand will remain basically balanced in 2024, but it may be tighter than in 2023.
Disclaimer: The above content is reproduced from China Coal Market Network, and the content posted does not represent the position of this platform.
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