IEA Predicts Record High Coal Demand as LNG Prices Soar
The International Energy Agency (IEA) is predicting that global coal demand will reach a record high this year, driven by rising natural gas prices and increased cooling demand due to a strong El Niño phenomenon.
According to the IEA's report, global coal consumption will rise 1.2% year-on-year to 8.94 billion tonnes, with China, South Korea, Japan, and Europe being among the regions shifting from gas to coal in power generation.
The strong El Niño has also driven up cooling demand, particularly in India and Vietnam, where hydropower output has been reduced. As a result, India's coal consumption is projected to grow by 4.2% this year to reach 1.353 billion tonnes.
However, if liquefied natural gas (LNG) shipments through the Strait of Hormuz resume, global coal demand could decline next year. The IEA notes that the future trajectory of the coal industry will depend heavily on natural gas prices, renewable energy generation, weather conditions, and geopolitical developments.