Coal prices fell 21 percent in 2025Q1 (q/q), reflecting weak import demand from Asia and steady increases in seaborne supply. The downward trend continued into April, with prices averaging $99 per metric ton (mt), as heightened geopolitical tensions and economic policy uncertainty weighed on demand. Coal prices are projected to decline by 27 percent (y/y) in 2025, to an average of $100/mt, followed by a further 5 percent drop in 2026. Risks to the coal price forecast are broadly balanced, with upside risks mainly related to the possibility of higher coal consumption in China and India, while downside risks include weaker-than-expected economic growth and a potential supply glut.

Global coal consumption continued to rise in 2024, although the pace of growth slowed significantly. Global demand increased just under 80 mmt—less than one-third of the increase recorded in each of the previous two years. The increase in China’s coal consumption slowed by 80 percent in 2024, to about 60 mmt, while growth in India’s demand softened by one-third to 70 mmt. Consumption in Europe and North America continued to decline, but at a slower rate than in 2023.

Global coal production rose in 2024, in line with demand. Coal supply increased by an estimated 75 mmt last year—just one-quarter of the increase recorded in 2023. Output expanded in China (by about 40 mmt), India (80 mmt), and Indonesia (30 mmt), while it continued to decline in the European Union (down 35 mmt) and the United States (down 60 mmt). Global trade of coal is also estimated to have reached an all-time high in 2024, although growth lost momentum. Increasing imports in China and ASEAN countries were met primarily by growing exports from Australia, Indonesia, and Mongolia.

Coal prices are projected to decline in 2025 and 2026. Coal (Australia) prices are forecast to fall by 27 percent (y/y) in 2025 and by a further 5 percent in 2026, amid a slowdown in global economic growth and weaker coal demand. Coal consumption is expected to be supported by rising power demand in emerging market and developing economies but hindered by expanding renewables, leading to a decrease in coal’s share of global power generation. These two considerations suggest that global consumption is expected to inch upwards in the next two years, with Asia’s share of global demand continuing to rise. India is expected to be the main engine of demand growth, as renewables are not yet sufficient to meet its rapidly increasing electricity needs. In contrast, China’s coal consumption growth is expected to come to a halt in 2025, driven by lower power sector demand and the rapid acceleration of renewables.

Risks to the coal price forecast are broadly balanced. On the upside, stronger-than-expected coal consumption in China and India could lift prices, particularly if growth in hydropower, solar, and wind generation falls short of 2024 levels. In contrast, downside risks include weaker-than-expected economic growth and a potential supply glut. Since the East Asia and the Pacific region, along with the South Asia region, account for about 80 percent of coal consumption, weaker-than-expected economic growth in these regions poses a material downside risk to coal prices. At the same time, coal supply could rise above forecast levels if producers such as Indonesia and the U.S. ramp up their production, or if successful diplomatic efforts to resolve the conflict triggered by Russia’s invasion of Ukraine results in expanded Russian coal exports.