Analysts are predicting a bearish outlook for thermal and coking coal prices in the next two years. According to the World Bank, thermal coal prices are expected to decline in 2025 and 2026 due to lower global consumption. This decrease is attributed to the transition to renewables and natural gas for power generation, displacing coal. The Australian Office of the Chief Economist also noted that China has already achieved its 2030 clean energy target ahead of schedule, leading to a reduction in thermal coal demand.
On the other hand, coking coal prices are expected to face oversupply issues, with production surpassing consumption levels. SunSirs, a commodity data group, anticipates an annual production of around 560 million tonnes, while consumption is unlikely to reach 550 million tonnes. As the steel industry, particularly in China, remains subdued, there is little expectation for a revival in coking coal prices.
Overall, the outlook for both thermal and coking coal prices is bleak, with downward pressure on prices expected in the coming years. The transition to renewables, reduced demand in key markets, and oversupply issues are all contributing factors to the anticipated price declines. Experts suggest that global coal consumption may have already peaked in 2024, marking a significant milestone in the global energy transition.
