The world coal consumption and production remained successive annual decline in 2016, fell by 1.7% and 6.2% respectively. In 2017, world coal market keeps sluggish growth, forecasted by IEA, the peak of world coal demand is waiting ahead in the coming years.
China, India and Japan are top three coal consumption countries in 2016 and is expected to take the lead in 2017 among the rest of the countries.
According to IEA statistics, the 2016 OECD coal consumption decreased to 1273.1 Mtce which strikes the bottom level since 1979 and was 23.5% lower than the OECD countries’ maximum coal consumption of 1 665.3 Mtce made by 2007.
The coal consumption of China is forecasted to continue descending from 2018 and the global coal consumption will keep a minimal increase of 0.6% till 2021. The main reason to cause this negative review is because of the consumption plateaus of the developed countries and the world’s largest coal importer China is gradually double the pace to abandon polluted ways to generate electricity. Those will offset the newly emerging coal demand of surrounding countries, especially in India and Southeast Asia.
2014 witnessed the first decline of coal production in this century. This trend remained through 2015 and aggravated in 2016 to 458 Mt which was result from the combined production of all coal types plummeted to its lowest level since 2010.
BP statistics indicates that China’s production experienced a record drop in 2016 which is fell by 7.9%, while in the US, the coal production decreased by 19%.
Looking back to OECD, the total coal production of OECD countries declined by 14.7% for the same period and bottomed the largest annual decline in the last season of 2016. Historically, OECD coal production as a percentage of global production was 56.6% in 1971 but has become 23.7% in 2016.
China’s industrial transformation has undoubtedly dragged the world coal production. Since 90s, China’s outstanding economic growth produced a “super cycle” for commodities. However, the upcoming slowdown in economic activity there has been a vital effect on coal and other energy.
China plays an irreplaceable role in world coal market and will stick on the top of world coal import country. The market is exploring new channels to transport coal to China or other countries. From years of investigation and practice, it is widely accepted that cross-border B2B e-commerce would be a blue ocean for world commodity trading.
In the last quarter of 2017, some international agencies made the coal price predictions in the near further:
• As forecasted by the World Bank in July: the price for coal will fall in 2017 to S55/mt. And since 2018, it will grow slowly.
• The report of IMF showed a different result, they predicted the coal price will suffer a slight drop in 2018 to S76.2/mt.
2018 is approaching, JumoreGlobal Insights will share more market information with global readers.