Global demand for coal may reach a record in 2026 — OilPrice
Global demand for coal in 2026 may grow by 1.2% and reach a record 8.94 billion tonnes. OilPrice cites this forecast by the International Energy Agency. One of the reasons cited is rising natural gas prices amid reduced liquefied natural gas flows through the Strait of Hormuz.
Rising demand in Asia
According to the outlet, reduced liquefied natural gas supplies through the Strait of Hormuz are forcing some countries to use coal more frequently for electricity generation. These include Japan, India, Bangladesh, the Philippines, South Korea, Thailand, Taiwan, China and some European countries.
China's demand for coal is forecast to increase by 1%, to about 5 billion tonnes. In India, it may rise by 4.2%, to 1.353 billion tonnes. In China, coal consumption has also increased in chemical production due to high oil prices, OilPrice notes.
Impact of gas prices
The IEA said that disruptions to shipping through the Strait of Hormuz do not directly affect the coal market, as virtually no coal is transported via this route. At the same time, more limited natural gas supply raises prices and prompts some power systems to switch from gas to coal.
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A strong El Niño event could be an additional factor. Higher temperatures may increase electricity demand in Asia, while lower hydropower generation could intensify the need for other sources of generation. This may have the greatest impact on major markets, including India and Vietnam.
Outlook for the US and 2027
In the United States, coal demand in 2026 is expected to decline by about 7%, according to the IEA's estimate, after an unexpected increase last year. The outlet links this to the availability of cheap domestic natural gas and the commissioning of significant solar and wind generation capacity.
The outlook for 2027 will depend on the restoration of liquefied natural gas flows through the Strait of Hormuz. If supplies recover, natural gas prices may decline, which could affect the balance between gas and coal use in the energy sector.
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