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The price of coal continues to fall and supply continues to increase.
Coal prices hit a three-year low, falling below $114 per tonne in January 2025.
This sharp price decline, which began in 2024, points to further expected declines in 2025.
Coal prices are expected to fall by a further 12% in 2025.
This decline is due to oversupply.
Global consumption reaches a record high.
In the United States and the European Union, demand fell by about 100 million tonnes each, while it increased by about 220 million tonnes in China and 100 million tonnes in India.
In Australia, production has stagnated due to labor shortages and sluggish exports to China, which have not fully recovered since China lifted a ban on Australian imports in January 2023, originally imposed in 2021.
The shift in global demand to Asia persists, with China and India now accounting for 70% of total consumption.
China’s coal production is set to rise 1.5% in 2025, to 4.82 billion tonnes.
This increase in production has been driven by the need to avoid lower coal availability due to carbon emissions caps and mine closures for safety breaches.
Utilities are already grappling with record coal inventories, which rose 12% in the two months to October.
However, concerns that Beijing’s economic stimulus will not be enough to spark growth have weighed on coal consumption.
In addition, heavy rainfall in China’s major power generation hubs has favored hydropower over coal.
Despite these factors, low coal prices and rising oil prices, which are approaching $80 per barrel for Brent, could push several Asian countries, including China and India, to prefer coal over oil and gas for power generation.
In conclusion, the collapse in coal prices represents an opportunity for many countries to reduce energy costs, despite environmental concerns associated with the use of this fossil fuel.
This economic convenience cannot hide the devastating environmental impact of coal, which continues to threaten our planet with harmful emissions and irreversible climate change.
