Here Are Factors That Will Affect The Coal Market In 2023

The world coal market is expected to remain robust in 2023, with demand for coal projected to plateau around the 2022 level of 8 billion MT through 2025. India is expected to see the largest increase in coal demand, followed by the EU at 6 % and China at 0.4%. China’s domestic coal production is projected to come in at 4.9 billion MT in 2023, up from 4.5 billion MT in 2022, while India’s coal production is estimated at approximately 950 million MT in 2023.

These are the main factors that will affect the coal market in 2023:

Coal Price

The future price of coal is expected to remain at mid-to-high levels, with Europe taking a good amount of coal from the US at a decent price. Thermal coal prices are expected to maintain strong in the first quarter of 2023, while metallurgical coal prices are seen easing further in 2023.

Key Production Risks

Key risks to the outlook include additional extreme weather events, thermal coal prices, green transition policies, disruptions arising from the spread of COVID-19 in China and the effect of sanctions on Russia. The market is oversupplied and will remain so in the medium term, with Australian output expected to pick up as meteorological disruptions ease, while demand will be knocked by slowing global growth.

Insight

Overall, the future of coal in the world is uncertain, with governments, banks and investors continuing to show a lack of appetite for investment in coal, particularly thermal coal. However, coal is still expected to remain a major source of power generation globally, with total energy consumption projected to increase by around 60% in the next 20 years.

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