Coal Trade Expected to Return to 2019 Levels
Following a severe dip as a result of the international lockdowns of 2020 and 2021, the coal trade is expected to return to 2019 levels according to the International Energy Agency’s (IEA) mid-year Coal Market Update for 2023.
According to the report, the major factor that has led to a surge in coal trade is the decline in coal prices. Cheaper coal has made imports more attractive, particularly for high-demand markets such as China.
To put the growth in demand in context, China (which is already the world’s largest coal consumer), has doubled imports of coal through the first half of 2023. Such is the growth of demand for coal, that the IEA has predicted that the seaborne coal trade may even surpass the 2019 record level of 1.3 billion tonnes.
The increased demand for coal also comes in the face of small declines in coal-fired power generation. As the IEA’s report suggests, these marginal declines have been more than offset by rises in industrial uses of coal, such as steel production.
In fact, despite popular perception, coal remains something of a ‘master resource’ for economies worldwide, with coal consumption in 2022 reaching an all-time record of 8.3 billion tonnes.
Consumption is especially concentrated in China, India and Southeast Asia - which are expected to account for three out of every four tonnes of coal consumed worldwide in 2023.
In total, the global coal trade in 2023 is expected to grow by more than 7%, outpacing overall demand growth.
With the global coal trade on the rise, dry cargo carriers should expect to see a concomitant demand for their services.
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