MOSCOW, September 15. /TASS/. Global thermal coal consumption will decline over the next two years due to a surplus of solid fuel on the market, Alexander Kotov, consulting partner at NEFT Research, told TASS.
In the Q2 of 2026, global energy prices rose amid the ongoing conflict in the Middle East. Although the crisis did not cause a shortage of solid fuel, it put indirect pressure on the market by driving up maritime transportation costs.
Additional factors behind the price increase included production restrictions in China following an accident at the Liushenyu mine and subsequent safety inspections, as well as supply disruptions from Colombia and South Africa. Starting June 1, the Indonesian government began controlling coal export volumes, which also put pressure on the industry, Kotov explained.
"This brought volatility back to the Asian market. As a result of the resulting imbalance, thermal coal prices in Asia surged sharply, exceeding levels seen two years ago. Over the medium term, in 2027-2028, the global thermal coal market is expected to enter a phase of cyclical cooling. The factors that supported prices in 2026 are gradually fading," the expert said.
Once domestic production in China stabilizes and Indonesian export flows adapt to the new regulatory mechanisms for allocating raw materials, a structural surplus will emerge on the market. In Europe, demand for thermal coal will continue to decline as new renewable energy capacity comes online.
"Russian thermal coal continues to compete with supplies from Indonesia and Australia, receiving price support from the Middle East crisis and higher gas prices. In the eastern markets, the balance is being shaped by the high price sensitivity of China, India, and South Korea, combined with their current need to build precautionary inventories," Kotov noted.
In the western market, Turkey remains the key coal consumer, with higher natural gas prices prompting the country to increase its consumption of Russian solid fuel.