Global demand for coal this year could reach eight billion tons, which corresponds to the historical maximum set in 2013, and demand growth is expected to continue next year, the International Energy Agency (IEA) announced in an updated market report.
Based on current economic and market trends, global coal consumption is forecast to rise 0.7 percent this year to eight billion tons, assuming China’s economy recovers as expected in the second half of the year, the report said.
China is the biggest consumer
According to the agency, demand is being fueled by rising natural gas prices, which is forcing many countries to switch back to coal and reopen closed thermal power plants.
The analysis estimates that China, which is “responsible for more than half of global coal consumption”, will be the main driver of demand growth in the second half of this year, after recording a three percent drop in demand in the first half.
It is also predicted that the demand for coal in India will increase due to the country’s economic growth and higher consumption of electricity, as well as that the European Union will contribute to the demand, as it increasingly turns to coal in the production of electricity, to replace the gas or conserve it. for the winter due to the drop in imports from Russia.
The International Energy Agency this week said global coal demand in 2022 will match the all-time high set in 2013 of about 8 billion metric tons. And next year, coal consumption will set a fresh record high, Bloomberg reports.
It is indicated that the coal market will oscillate in 2023, primarily due to the entry into force of the European Union embargo on this energy source, which is why prices could continue to rise in the future.
Decrease in supply
As rising natural gas prices have made coal more competitive in many markets, this has boosted demand, which in turn has fueled international coal prices, which hit three all-time highs between October last year and May this year.
Sanctions and an embargo on Russian coal have disrupted markets, and problems in other countries’ main exporters of the energy product have contributed to a reduction in supply.
– Since other coal producers face limited capacities to compensate for Russian production, prices on the futures markets of coal indicate a continuation of the tight situation in the coming year and beyond – the IEA report states.