Coal market forecast: prices expected to decrease in 2025

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Coal prices are projected to experience a decline in 2025, according to insights shared by Joseph Clarke and Alex Thackrah from Argus Media, a reputable provider of energy and commodity price benchmarks. Their findings were detailed in the paper titled Global Thermal Coal Market Review and Outlook – 2025.

The analysts observed that coal prices remained stable across major markets throughout 2024, a noticeable departure from the significant price fluctuations witnessed in previous years. Despite this stability, there were slight price increases noted during the winter season.

“We anticipate that API 2 prices will decrease from an average of $112 (R2 099) per ton in 2024 to approximately $105 per ton in the year 2025. Despite this decline, most seaborne origins are expected to maintain competitive pricing in the European market,” they stated.

Data from Transnet National Ports Authority revealed an 8.5% rise in bulk exports from Richards Bay in 2024, with coal accounting for the majority of the shipments. The total annual volume reached 75,678,379 tons, falling short of the full capacity of the Richards Bay Coal Terminal, which stands at 91 million tons.

The outlook for global thermal coal demand in early 2025 faces notable obstacles. These include slowing economic growth and an oversupply of steel in China, a strengthening US Dollar, and the looming possibility of a tariff war. Donald Trump has expressed intentions to increase tariffs post-inauguration on January 20.

“Coal inventory levels in key demand centers such as China, India, and Europe are healthy as of mid-December. The absence of a robust La Niña weather pattern is predicted to mitigate supply risks associated with rainfall in coal-producing regions like Indonesia, Colombia, Australia, and South Africa. These factors, combined with aggressive pricing strategies by Russian suppliers aiming to safeguard their market share in contracting markets, are anticipated to exert downward pressure on prices in the near term, notwithstanding seasonal considerations,” they elaborated.

However, the analysts also underscored the potential for price volatility. The increasing reliance on coal-fired power plants in Europe and other areas as peak-load facilities has made long-term planning more complex. Additionally, tight market balances in the gas and LNG sectors in the upcoming months could contribute to fluctuations in coal prices, even at reduced levels.

In conclusion, the forecast for the coal market in 2025 suggests a probable decrease in prices, driven by various factors affecting supply and demand dynamics on a global scale. As the industry navigates through these challenges, stakeholders will need to stay vigilant and adaptable to navigate potential price fluctuations in the coming year.

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