Global seaborne thermal coal market has grown strongly in recent years, doubling in volume between 2006 and 2019, from 500 million tonnes to 1,000 million tonnes. The market’s average growth was almost 40 million tommes per annum, or around eight times the average annual output of an Australian thermal coal mine.
Recent analysis by Commodity Insights suggests that Australia’s world-leading thermal coal producers can benefit from strong future demand growth. Commodity Insights projects Asian thermal coal imports will grow by over 270 million tonnes to more than a billion tonnes per annum over the next decade.
In the long term, government policy in relation to both energy sources and emissions reduction are important drivers of coal’s share of power generation and therefore import demand. In this context, these forecasts will continue to be subject to changes in government policy, including emissions reduction measures to meet Paris Agreement targets.
Asia is the dominant market for thermal coal. In 2006, the global seaborne thermal coal market was approximately 500 million tonnes in volume. Asia accounted for around 300 million tonnes, of which the traditional north Asian importers (Japan, Korea and Taiwan) accounted for 240 million tonnes or 80 per cent. China and India combined for less than 35 million tonnes and Southeast Asia combined for 30 million tonnes.
Since then, global import demand growth has doubled to slightly more than a billion tonnes, with all the growth coming from Asia. China led the growth, passing Japan as the world’s largest importer in 2011, a status it still retains. India followed, becoming the world’s second largest importer in 2014, and then South East Asia accelerated, doubling its imports between 2011-18. In India, the growth in demand for thermal coal has been over 600 per cent during the past decade.
The developing regions of Asia – China, India, Thailand, Vietnam, Indonesia, the Philippines, Pakistan and Bangladesh – all have low levels of per capita electricity consumption. The most developed of these – China – has a consumption level half of Japan’s and a third of the USA’s. India’s per capita consumption level is only one-tenth of Japan’s, and Bangladesh’s is less than one-twentieth of Japan’s.