Growth in global coal de­mand sub­dued over next 5 years: IEA

Enterprise - - International news -

Global coal de­mand will be sub­dued over the next five years, grow­ing at just 0.5 per­cent a year, marginally higher than cur­rent lev­els, due to lower con­sump­tion in China, ac­cord­ing to the In­ter­na­tional En­ergy Agency (IEA).

Coal con­sump­tion fell last year by 1.9 per­cent to 5.357 billion tonnes from a year ear­lier as lower gas prices, a surge in re­new­ables and ef­fi­ciency im­prove­ments damp­ened de­mand, the IEA said in its an­nual coal mar­ket re­port.

Global coal de­mand is ex­pected to rise by an av­er­age rate of 0.5 per­cent a year to 5.534 billion tonnes by 2022, “only marginally higher than cur­rent lev­els and mean­ing that coal use all but stag­nates for around a decade,” the agency said.

Coal use will de­cline in Europe, Canada, the United States and China - the world´s largest coal con­sumer - but rise in south­east Asia, In­dia, Pak­istan and Bangladesh.

Over the pe­riod to 2022, In­dia´s con­sump­tion is seen grow­ing the most at 3.3 per­cent a year to 605 mil­lion tonnes.

Hav­ing peaked in 2013, China´s con­sump­tion is ex­pected to de­cline by 0.1 per­cent a year to 2.787 billion tonnes in 2022 as coal use in the in­dus­trial and res­i­den­tial sec­tors falls due to ef­forts to im­prove air qual­ity.

U.S. coal con­sump­tion will in­crease slightly next year then de­cline to 469 mil­lion tonnes by 2022, while EU con­sump­tion is ex­pected to fall to 293 mil­lion tonnes by 2022.On the sup­ply side, to­tal global coal sup­ply is ex­pected to in­crease by 0.8 per­cent a year to 5.534 billion tonnes in 2020, mainly driven by non-OECD coun­tries.

Coal´s share in the global en­ergy mix is fore­cast to de­cline to 26 per­cent in 2022, com­pared to 27 per­cent in 2016, the re­port said. Af­ter years of de­cline, coal prices con­tin­ued to strengthen this year, driven by a sharp cut in Chi­nese coal out­put cou­pled with strong de­mand across the Asi­aPa­cific re­gion and in Europe.

Euro­pean API2 2018 coal fu­tures are cur­rently trad­ing around $90 a tonne due to higher de­mand in China and sup­ply is­sues.

De­spite high prices in 2016-17, coal project de­vel­op­ment has been slow.

Slug­gish de­mand and un­cer­tain prospects for China and In­dia as well as Korea and Ja­pan have put a brake on in­vest­ment, the IEA said. As not much sup­ply has been added over the past year that in turn led to price in­creases.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.