Following significant shifts in trade flows during 2022, global coal trade saw a new record in 2023 with growth in both thermal (+7%) and met coal (+15%) exports. Both seaborne trade, which stood at about 1.38 Bt in 2023 and total trade, slightly surpassing the mark of 1.5 Bt, reported historical highs. Indonesia has once again driven the growth in thermal coal exports, largely catering to rising demand in China. Despite high stock inventories and significant growth in domestic production, Chinese imports from Indonesia surged by 29%, reaching approximately 220 Mt, equivalent to about 15% of global coal trade. As Indonesian exports to its second largest buyer, India, remained rather flat, almost all the growth in Indonesian exports can be attributed to Chinese imports.

Australia’s thermal coal exports rose by more than 10% during 2023, after China ended its unofficial ban of Australian coal and the end of La Niña improved mining conditions. In contrast, Australian met coal exports faced a decline after operational problems in some mines. Thermal and met coal exports from the United States have grown by 17% on aggregate in 2023, despite international coal prices falling since 2022. The decline in domestic coal consumption left the opportunity for some thermal coal to be sold in international markets.

The surge in global met coal trade was largely driven by Mongolia, which more than doubled its exports during 2023 to around 54 Mt. China is almost the only buyer of Mongolian met coal, although other countries are exploring the possibility of receiving Mongolian coal. A new railway between Talvan Tolgoi in southern Mongolia and Gashuunsukhait-Gantzmod at the border with China commenced operation in late 2022 and supported Mongolia’s rising exports to China.

Developments in Russia are less clear since its invasion of Ukraine. However, based on the changes in importer’s demand and rearranging trade routes, we estimate Russian met coal exports to have recovered from 2022, while thermal coal exports have likely decreased.

In conclusion, all major exporters including Colombia and South Africa have increased their exports during 2023, except Russia.

Global coal trade in 2024 is projected to see a modest increase of 1.0%. However, this forecast is highly sensitive to developments in China, which is the destination of almost every third tonne of coal traded globally. In the first six months of 2024, Chinese imports grew by 12% despite healthy stocks, which is remarkable considering that imports in 2023 were 140 Mt higher than the former record. Nonetheless, for the remainder of the year, we expect Chinese imports to remain flat as a recovery in hydropower is expected to reduce growth in coal demand and an increase in production is likely once safety inspections in Shanxi have been relaxed, resulting in a small annual growth.

India, the second largest importer globally, showed a remarkable growth of about 21% in seaborne coal imports during the first four months of 2024. India extended the obligation to blend imported coal in plants designed to use domestic coal until at least October 2024, despite significant growth being observed in the domestic production of coal. This underscores India’s goal to guarantee security of supply amid fast growing demand. In addition, the extension of the blending obligation is another indication that strong imports by India will persist throughout 2024. Even though India seeks to reduce the quantity of imports, new routes are being established such as the railway from Russia to India via Iran, and a trial of met coal deliveries from Mongolia.

Japan, Korea and Chinese Taipei recorded decreasing imports in 2023 and are expected to continue to lower their imports slightly during 2024. Conversely, Viet Nam exhibits a remarkable change in coal imports, growing 43% in the first four months of 2024 owing mainly to low hydropower availability and strong and continuing growth in power demand. However, this increase is expected to flatten for the rest of the year.

Considering significant demand for imports in China, India and other countries in the region such as Viet Nam, we expect Indonesia to meet a large proportion of the additional demand. In 2024, we forecast Indonesia to export 534 Mt, growing 3% year-on-year. Against this background, Indonesia is set to account for almost half of global thermal coal exports in 2024. This share is lower when measured in energy terms, as the share of low calorific value (CV) coal in Indonesia’s exports is larger than the other major exporters.

We expect the biggest decline in coal exports to take place in Russia in 2024 (-16 Mt). After sanctions following Russia’s invasion of Ukraine, Russia faces further difficulty because of US bans on major Russian producers which, in turn, signalled other importers with trade relations with the United States, to reduce Russian coal imports. Russian producers are also encountering national railway transport issues in the east and export duties that can limit their international competitiveness given their price sensitive buyer base.

Australia, the largest exporter of met coal and second largest exporter of thermal coal, is expected to see modest growth of 1.8% in 2024. In the first five months of 2024, Australia showed growth of about 5% compared to the same period last year. Nonetheless, in anticipation of moderate demand from most of its major importers, we expect Australian exports to flatten for the rest of the year.

We expect Mongolian met coal exports to continue to grow in 2024 to a total of 58 Mt. As a result, Mongolia is likely to become the second largest exporter of met coal and the fifth largest exporter of coal, surpassing Colombia and South Africa.

In the United States, the decrease in coal demand has outpaced the reduction in coal production in 2023, leaving surplus for more exports. In 2024, this is expected to switch, owing to abundant stocks in US power plants. Moreover, some coal exports from the United States have been restricted owing to the collapse of Francis Scott Key Bridge in Baltimore in March 2024.

In summary, global trade in both thermal and met coal are expected to show a slight increase gaining 0.7% and 2.0% respectively in 2024.

For the last ten years, China, India, Japan, Korea and Chinese Taipei consistently ranked as the world's top five coal importers in that order, highlighting Asia's dominant role in global coal trade. This period witnessed notable economic growth in China and India which fuelled coal imports. Simultaneously, coal imports in Japan, Korea, and Chinese Taipei remained relatively stable. Now, Viet Nam, which recorded remarkable growth in imports in 2023, is set to surpass Chinese Taipei as the fifth largest coal importer in 2024. Its growing demand for coal is primarily driven by developments in the power sector. In the short term, low availability of hydroelectric plants and strong growth in power demand drive the need for coal. While Viet Nam is traditionally reliant on seaborne coal, it has intensified coal imports from Laos over the past two years and plans to further increase this trade. Looking ahead to 2030, Viet Nam aimed to build five new coal-fired power plants that could further increase the demand for coal. However, the announced cancellation of the Song Hau 2 project casts doubt over the others.

Contrary to growing imports in Asia, monthly coal imports into the European Union and United Kingdom have declined to their lowest level of the 21st century. In 2024, we expect Türkiye, which only recently surpassed Germany as the largest importer outside the Asia Pacific region, to import more coal than the European Union, emphasising Europe’s decreasing involvement in global coal trade.