The Cabinet’s Information and Decision Support Center highlighted a report by the International Energy Agency (IEA) titled “Coal: Mid-2025 Update,” which noted that global coal demand in 2024 increased by 1.5%, reaching a record 8.79 billion tons. Although this growth is the slowest since the COVID-19 pandemic, cumulative demand since 2020 has exceeded 16%.

The report stated that coal use for electricity generation reached an all-time high of 10,766 terawatt-hours, while metallurgical coal used in iron and steel production declined by 0.8%. China remains the main driver of global coal demand, accounting for 56% of global consumption and consuming one-third of global coal production solely in the energy sector.

The report indicated a slight decline in global coal demand by less than 1% in the first half of 2025 due to regional disparities; in China, slowing electricity demand and increased renewable energy production led to reduced coal use.

In India, expansion of renewable energy and early rains contributed to a decline in coal use compared to the same period in 2024. Conversely, demand in the United States rose by 10%, driven by increased electricity demand and higher gas prices, prompting some power plants to switch from gas to coal. Demand also increased in the European Union due to lower wind and hydro production and higher gas prices.

Despite these differing trends, the report noted that global coal demand will remain roughly at 2024 levels throughout 2025; regional changes balance each other out, with declines in China and India offset by increases in the EU and the US. A slight decline is forecast for 2026, with demand remaining close to 2024 levels.

On production, global output rose by 1.4% in 2024 to 9.15 billion tons, driven by increases in China and India, where coal is a major local energy source. Indonesia produced 836 million tons, leading exporters. Production is expected to reach a new record in 2025 despite weak demand, driven by increases in China, India, and the US, offset by expected declines in Indonesia.

The report explained that production is likely to decline in 2026 due to weak demand and stockpile accumulation, except in India, which is expected to continue increasing production. Production in China is expected to fall for the first time since 2022 due to excess stock and weak demand, as well as in Indonesia and the US.

Regarding international trade, coal exports exceeded 1.5 billion tons in 2024 despite declining demand in importing countries. China’s imports rose significantly, pushing global trade to unprecedented levels. However, in 2025, trade volume is expected to decline due to reduced Chinese imports; most major importing countries, except Vietnam, plan to reduce their imports.

In 2026, this decline is expected to continue for the second consecutive year, a first this century. With continued weak prices and demand, exporting countries such as Indonesia, Russia, and Australia will face increasing pressure, although Australia’s performance may improve if its metallurgical coal mines resume activity.

Regarding prices, the report noted that increased Chinese supply caused local and international price declines, with thermal coal prices in the first half of 2025 hitting their lowest levels since 2021. Despite stable global prices since February, price drops and weak demand are pressuring producers; some companies in Colombia have announced production cuts, and many Russian companies may incur heavy losses.