Global coal demand rose by 1.5% in 2024 to reach 8.79 billion tonnes (Bt), a new record. The growth was the slowest annual rate since the Covid-19 crisis in 2020 caused coal demand to decline. The post-Covid economic recovery and high natural gas prices have driven a sharp rise in global coal demand in recent years, but the growth has slowed year-on-year since 2021. Coal demand grew by 7.7% in 2021, 4.4% in 2022 and 2.3% in 2023. Despite slowing demand growth on an annual basis, the cumulative increase since 2020 amounts to more than 16%.

Coal use for power generation, the main driver of global coal demand, reached its highest recorded level at 10 766 terawatt hours (TWh) in 2024. Demand for metallurgical coal for iron and steel production, the largest source of non-power-related coal consumption, has been more stable. In 2024, metallurgical coal use decreased by 0.8%.

China1 plays a unique role in global coal markets. It accounts for 56% of global coal consumption – almost 30% more than the rest of the world combined. One of every three tonnes of coal consumed globally is used in Chinese power plants, making China and its power sector the largest single driver of global coal demand.

In the first half of 2025, global coal demand is estimated to have decreased slightly, by less than 1%, amid fluctuating trends across different regions. In China, weaker electricity demand growth and a surge in power output from renewables caused a decline in coal power generation. The small decline in China’s overall coal demand came despite growth in some sectors like chemicals. In India, expansion of wind and solar and an early monsoon resulting in stronger electricity generation from hydropower, and weaker electricity demand growth in the first half of 2025, pushed coal power generation – and overall coal demand – into decline from the high consumption levels seen in the same period a year earlier. By contrast, coal demand in the United States is estimated to have increased by 10% in the first half of 2025, driven by strong electricity demand and higher natural gas prices, which prompted some electricity generation to shift from gas to coal. In the European Union, coal demand grew in the first half of 2025 driven by the electricity sector, as a result of low wind and hydro output and higher gas prices.

Despite such trends in the first half of the year, our full-year forecast for global coal demand in 2025 is little changed from the one published in our annual Coal 2024 report in December 2024. The structural drivers underlying coal demand remain the same, both in the electricity and industrial sectors. On a global level, the main regional changes compared with our December forecast cancel each other out. In China and India, demand will be weaker than foreseen, but this is offset by higher-than-expected coal demand in the European Union and United States. As a result, global coal demand is still forecast to rise slightly in 2025.

After the slight increase in global coal demand in 2025, our forecast shows an almost equal decrease in 2026, leaving it close its 2024 level. Developments in China will largely shape global coal trends. In our current forecast, China’s coal demand declines slightly in 2025 and recovers in 2026, getting close to 5 Bt. Coal consumption in India is expected to grow by 2.5% in 2026, with the ongoing expansion of renewables continuing to limit its growth in the electricity sector.

In Europe, the decline in coal demand is set to accelerate in 2026 after the small expected decrease in 2025. In the United States, demand is expected to return to 2024 levels, with the new administration’s measures to support coal use and natural gas market trends likely to affect the trends.

Domestic coal is the largest source of energy supply in both China and India, and therefore, coal production is a key domestic energy security issue. Following shortages in 2021, both countries increased production for several years, hitting a record high in 2024. Indonesia, the world’s top exporter, reached 836 million tonnes (Mt) due to strong international and domestic demand. Despite declines in other regions, global coal production reached an all-time high at 9.15 Bt in 2024.

China and India increased production in response to 2021 shortages and high energy prices, leading to an oversupply in coal markets. In China and India, efforts to expand production persist, potentially reducing import volumes due to moderate demand. In Indonesia, where production has set new records in recent years, coal output is projected to fall below 800 Mt in 2025, driven by low prices in international markets. By contrast, production is set to grow in the United States. Overall, despite sluggish demand and high inventories, a new high for coal production, of more than 9.2 Bt, is expected in 2025.

Given the current landscape of abundant supply, low prices, and projections indicating stable coal demand through 2026, coal production will decrease across all major producing nations, with the sole exception of India. In India, both state-owned enterprises and private operators of captive and commercial mining blocks are expected to continue increasing coal output. In China, with very high stocks throughout the supply chain and no expected rebound of demand, we expect a decline in 2026, the first since 2022. China, where more than half of the world’s coal is produced, is of paramount importance in shaping global coal trends.

We expect Indonesia, the third-largest producer, to reduce production as low prices and weak demand from international markets continue. In the United States, production is expected to decline slightly in 2026, as both domestic and international markets are weaker than in 2025.

During the 21st century, international coal trade volume has increased nearly every year averaging an annual growth rate of 4%, which is higher than the rates for demand or production. At first glance, the increase of coal trade volumes is counterintuitive, as coal demand in many countries running mostly or completely on importing coal such as the European Union, Japan, Korea, Chinese Taipei and the UK, has been declining, and the bulk of growth of coal demand came from domestic coal consuming countries such as China, India and Indonesia. However, in 2024, Chinese imports increased significantly, resulting in coal trade volumes exceeding 1.5 Bt for the first time.

On the supply side, Australia has maintained its position as the top supplier of high-value coking coal, but Indonesia has proved to be the most flexible exporter, becoming the top exporter by far and surpassing 550 Mt in 2024.

As most major importers are reducing imports, a drop in China’s imports drives the global trend to decline. Since 2022, China's coal oversupply has boosted stocks. Following two years of higher-than-expected imports, Chinese imports and global trade volumes are likely to decrease in 2025. In fact, among the top six importers, only Viet Nam is expected to increase imports in 2025.

On the supply side, most exporters will see their volumes shrink. Indonesia, the largest supplier to China, is expected to have the largest reduction. Colombia will also see a big contraction, as Glencore has announced significant production cuts. Australian exports of metallurgical coal are set to decline owing to accidents in some of its mines and the current low-price environment.

China has been the main engine of growth for international coal trade up to 2025. As things stand today, with demand stagnating, abundant stocks and strong production, we do not expect a rebound in Chinese imports in 2026. With coal imports by the European Union, Japan, Korea and Chinese Taipei expected to continue declining, and India focusing on increased production amid moderate demand growth, we anticipate a further drop in coal trade in 2026—for an unprecedented second consecutive year in this century, according to IEA statistics.

On the supply side, most exporters will struggle amid low prices and weak demand, although Australia can perform better if metallurgical coal mines return to operation. Russian Federation’s (hereafter: Russia) exports continue to be uncertain because, while the government has announced support for coal mines, low prices and sanctions place a heavy burden on the industry.

Coal prices soared after coronavirus (Covid-19) lows, peaking in 2022 due to Russia’s full-scale invasion of Ukraine and the resulting energy supply disruptions. Meanwhile, China’s coal supply has outpaced demand, boosting inventories and putting downward pressure on prices domestically and internationally. As a result, thermal coal prices in the first half of 2025 dropped to their lowest since 2021.

While thermal coal prices in China continue to decline, international prices in July remain similar to those in February. Low prices and weak demand are hurting producers. In Colombia, Glencore has announced reduced production up to 10 Mt in 2025. In Russia, where estimates suggest more than half of coal companies are making a loss, the government has announced support for the coal industry. In Indonesia, the largest coal exporter and one that relies heavily on China, producers will try to use the growing domestic market to redirect part of the volumes lost in the international markets.