Coal

The coal industry remains significant in the global economy, particularly for electricity generation and industrial processes like steel and cement manufacturing. Coal extraction involves various mining techniques, from manual methods to large-scale operations using heavy machinery.

The coal industry's performance is driven by rising global electricity demand, especially in Asia-Pacific, and the steel industry's reliance on metallurgical coal. Economic growth increases energy needs, but the industry faces challenges from the transition to renewable energy and natural gas. Technological advancements in mining and carbon capture are crucial, while regulatory changes and geopolitical factors also significantly impact the industry.

The global coal market is competitive, with major producers including China, India, Indonesia, and Australia. China and India are also primary consumers. Large enterprises dominate, focusing on extraction techniques, alliances, expansion, and investments. The industry sees consolidation, with China consolidating its coal industry into large, state-owned conglomerates. Companies compete on price, scale, and coal quality.

In the first quarter of 2025, coal prices fell by 21% due to weak Asian import demand and increased supply, averaging $99 per metric ton. Global coal consumption rose in 2024, driven by India, while consumption declined in Europe and North America. Coal prices are projected to decline by 27% in 2025 and a further 5% in 2026 due to slower economic growth and weaker demand. While emerging markets will support consumption, renewables will hinder it, decreasing coal's share of power generation. Global coal consumption is projected to marginally decrease in 2025 and continue falling in 2026. China's coal consumption growth is expected to halt in 2025, while India is anticipated to be the main engine of demand growth. Some anticipate global coal consumption to remain relatively stable due to rising electricity demand.

The coal industry faces cyclical volatility tied to global economic conditions. Commodity price volatility is influenced by supply-demand dynamics and geopolitical events. Regulatory exposure is a major concern due to stricter environmental standards, increasing operational costs. ESG pressures can limit investment and lead to stranded assets. Competition from renewables and natural gas erodes demand, and geopolitical factors can disrupt supply chains.