Coal, which supplies around 30% of the world's energy, had seen year-on-year production growth for more than a decade before the Covid-19 lockdowns brought a sudden fall in demand in 2019–2020.
According to the International Energy Agency, production and demand were projected to bounce back in 2021 by roughly 12% and 2.6% respectively — still below 2019 levels, with demand not expected to peak until around 2025, at approximately 7.4 billion tonnes.
IEA Director of Energy Markets and Security Keisuke Sadamori noted at the time: "The Covid-19 crisis has completely reshaped the global coal markets. Before the pandemic, we expected a small rebound in coal demand in 2020, but we have since witnessed the largest drop in coal consumption since the Second World War."
The stability that followed was attributed largely to sustained demand from Asian economies, with the Pacific Basin — led by Japan, Korea and China — overtaking the Atlantic Basin as the dominant trade route. China alone accounts for roughly half of global coal demand, making its trade decisions highly influential on world prices.
Producer dynamics also shifted: Indonesia expanded supply to China and other Asian markets, while South Korea and India both announced plans to reduce coal-fired generation in favour of renewables through the 2020s. Ten countries account for roughly 90% of global coal production, led by China, the United States and India.
This market commentary is provided by Merchant Trade Guarantee Corporation Company Limited (MTG), a non-bank financial company specialising in trade and structured-finance consultancy since 2000.