China, India and the US will remain the largest consumers of thermal coal, while China, India and Russia will remain the largest consumers of coking coal during the period to 2027, a new report by BMI Research shows.
In its ‘Industry trend analysis: global forecast to 2027’ report, BMI forecasts an increase in Chinese consumption of thermal coal from 3.4-billion tonnes in 2018 to 3.5-billion tonnes by 2027, with growth slowing to an average of 0.5% year-on-year over the next decade, compared with the 4.2% year-on-year growth the decade before.
Similarly, China's absolute consumption of coking coal will decrease from 652-million tonnes in 2018 to 647-million tonnes by 2027.
Unpacking the global trends in coking and thermal coal production and consumption for the period from 2018 to 2027, BMI says that, despite the slowdown, China's consumption will be two to three times larger than that of the second-largest consumer, India, by the end of the forecast period.
However, owing to slowing economic demand and a waning of domestic steel demand, China will substantially lose its market share of coking coal consumption to India, Japan, Kazakhstan, Ukraine and Turkey, which will increase their market shares.
China's market share of coking coal consumption will decrease from 63% in 2018 to 57% by 2027, while India's market share will increase from 11% in 2018 to 17% by 2027 on the back of a strong domestic steel sector.
Similarly, China will also lose its market share of thermal coal consumption to India, Turkey and Indonesia over the coming decade.
China's share of global thermal coal consumption will decline from 50% in 2018 to 45% by 2027, while that of India will increase from 17% in 2018 to 24% by 2027.
Meanwhile, China, India and the US will also remain the largest producers of thermal coal up to 2027, while China, Australia, Russia and Indonesia will remain the largest producers of coking coal until 2027.
China will maintain its dominance in the producers' market for both types of coal, with absolute thermal coal production increasing from 3.2-billion tonnes in 2018 to 3.3-billion tonnes by 2027, the research firm said.
“Although this represents a significant slowdown in growth from the last decade – 3.1% year-on-year during 2008 to 2017 compared with 1.1% year-on-year during 2018 to 2027 – China will remain the largest global producer in absolute terms, with production in 2027 being triple that of India, the second-largest producer of 1.1-billion tonnes.”
“Similarly, China will increase its coking coal production from 537-million tonnes in 2018 to 555-million tonnes by 2027, with production in 2027 being triple that of the second-largest producer, Australia (184-million tonnes),” BMI points out.
In 2026, Russia is expected to surpass Indonesia as the third-largest coking coal producer in the world.
“Over the years, China, Australia and Indonesia will slowly lose the global market share of coking coal production to Russia, India and Mongolia,” BMI adds.
In addition, China, the US and Indonesia will slowly lose global market share of thermal coal production to India, Russia and Poland.