Global coal demand to reach record high in 2024 – IEA

Global demand for coal will rise to an all-time high of 8.77 billion tons in 2024, the International Energy Agency (IEA) predicts in its report.

At the same time, it is expected that the growth rate in 2024 will slow down compared to previous years – to 1% yoy. For example, in 2023, this figure increased by 2.4% year-on-year.

The main driver of coal demand growth will be the energy sector, where coal-fired electricity production should reach a historic high of 10,700 TWh by the end of the year.

According to the IEA, coal demand in China is expected to grow by 1% y/y in 2024 to another record of 4.9 billion tons, and in India – by more than 5% y/y – to 1.3 billion tons. In the EU and the US, coal demand continues to fall, but the decline has slowed. By the end of the year, it will decline by 12% and 5%, respectively, compared to 23% and 17% in 2023.

Over the next three years, the agency predicts that global coal demand is likely to stabilize, reaching 8.87 billion tons by 2027.

Demand for coal in developed countries continues to decline. However, this is expected to be offset by the opposite trend in several transition and developing countries. For example, the use of coal-fired power plants in India, Indonesia, and Vietnam will increase due to the need for additional energy, which is related to economic growth.

In 2024, China is focused on diversifying its energy sources, continuing to build nuclear power plants and accelerating the expansion of solar and wind capacity. In addition, the country’s hydropower industry rebounded after several years of poor performance.

Nevertheless, electricity demand in China is growing rapidly, on average outpacing GDP growth since 2021. The main factors are the electrification of services, as well as the needs of new industries such as data centers.

Global coal production is expected to reach a historic peak of over 9 billion tons in 2024.

According to IEA estimates, in 2024, strong demand pushed international coal trade, including thermal and metallurgical grades, to a new high of 1.55 billion tons. In particular, China’s coal imports may exceed 500 million tons in 2024 compared to 474.4 million tons in 2023.

In October, WorldSteel downgraded its short-term forecast for global steel demand in 2024. Volumes are expected to decline by 0.9% compared to 2023 to 1.75 billion tons, while the previous forecast assumed a 1.7% y/y increase – to 1.79 billion.