Steam Coal Market

Global Steam Coal Market Size (2024 to 2032)

The size of the global steam coal market was worth USD 145.43 billion in 2023. The global market is anticipated to grow at a CAGR of 2% from 2024 to 2032 and be worth USD 173.80 billion by 2032 from USD 148.34 billion in 2024.

MARKET DRIVERS

The steam coal market continues moving forward due to the increasing electricity demand. There was a 2.5 % growth in electricity needs. Most of the increase is by major economies such as China, the US, and India.

Electricity demand in the world increased by 4 % in 2022 and 5 % in 2023. This primarily came from China and India in the Asia Pacific region. In addition, the ring number of electric cars, the growing electrification in total final energy consumption, rapid urbanization, and industrialization are all contributing to the demand for electricity. Furthermore, the electrical energy consumption in the UK and US will increase by around 50 % by 2036 and will double by 2050. Thus, it will lead to a change and evolution of the grid line with these trends. Additionally, in the next three years, low-emission sources are expected to cover most of the growth in global electricity demand. Therefore, it shows a shift towards cleaner energy sources to meet the rising demand.

The limited availability of alternative fuels is propelling the demand in the steam coal market. At the same time, there are sustainable alternatives for coal in the heating sector. It includes biomass and natural gas. Their supply is limited and cannot meet the growing energy demand. Additionally, the use of refined waste-derived alternative fuels is a promising solution in power plants. But it requires significant changes to accommodate the new fuel. Furthermore, many countries are taking steps to reduce their dependence on fossil fuels. Thus, coal remains a crucial part of the electricity system, supplying essential and on-demand electricity to industries and households.

MARKET RESTRAINTS

Environmental concerns are restricting the growth of the steam coal market. Stricter environmental laws governing the mining and use of coal were introduced into effect as a result of the growing emphasis on lowering greenhouse gas emissions and halting climate change. In addition, the shift towards cleaner energy sources is due to increased knowledge of the harmful environmental effects of coal. This includes water and air pollution. Furthermore, the cost and accessibility of renewable energy sources like solar and wind power are reducing. This makes it an increasingly appealing substitute for coal. Moreover, the market is growing slowly. This is due to pressure from stakeholders and investors to lessen their reliance on fossil fuels.

MARKET OPPORTUNITIES

The steam coal market will thrive because of environmental regulations, renewable energy advancements, and technological innovations. Advancements like clean coal technologies, high-efficiency boilers, and coal cofiring with biomass are presenting potential opportunities for companies to grow. Likewise, investing in carbon capture and storage advancements could potentially decrease environmental impact and extend the lifespan of coal-fired power plants. In addition, advanced boiler technologies can improve fuel efficiency and reduce emissions. Thus, promoting sustainability and cleaner coal-fired power generation.

MARKET CHALLENGES

The steam coal market faces several geopolitical challenges. As per the World Bank, coal prices are coming down from their highs in 2022. However, it remains above the 2017 to 2021 coal average price. Moreover, the government's determination to transition away from coal is heightened by geopolitical risks from Ukraine's invasion. The Global Coal Forum also highlights the multi-layered and unavoidable challenges faced by coal investors. This includes markets distorted by war, trade constraints, and the existential threat of the energy transition, along with geopolitical shifts and high energy coal prices.

IMPACT OF COVID-19 ON THE STEAM COAL MARKET

There was a noticeable impact of COVID-19 on the steam coal market. The pandemic had a significant impact on the demand and revenue of steam or thermal coal. The pandemic has caused a decline in thermal coal demand globally. This resulted in cutbacks of imports and production. Thus, it is driven by lower power-sector coal demand. Moreover, the short-term impact of COVID-19 on coal power demand was significant and unprecedented. Also, the pandemic accelerated the shift away from fossil fuels and towards renewable energy sources. These are cheaper and safer for consumers. Additionally, coal demand in China increased by 5.5 % in the first half of 2023. This was because of lockdowns and low hydro output. Therefore, it highlights the country's increased reliance on coal-fired power generation.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Steam Coal Market Analysis By Calorific Value

The high calorific segment holds the maximum share of the steam coal market. This coal is often in high demand due to its higher energy content. Also it is especially used in industrial applications and power generation. This segment is typically valued for its efficiency and energy output. Moreover, the major companies in the high calorific coal market include PT Adaro Energy, Coal India Limited, Alpha Natural Resources, and China Shenhua Energy Company Limited.

Global Steam Coal Market Analysis By Volatility

The low-volatile coal segment captured the largest portion of the steam coal market share. It is used for baseload electricity generation due to its high heat content, stability, and effective combustion in power plants. Demand and market share rise as a result. For instance, China heavily relies on low-volatile coals due to their abundance and suitability for its large power plants. Other regions like India might utilize more medium volatile coals because of their specific needs and resource availability.

REGIONAL ANALYSIS

North America's steam coal market value is expected to grow in the coming years. In the US and Canada, thermal coal is a major energy source for the production of electricity. Also, both nations sell thermal coal to South Korea, Japan, China and India. This generates a lot of power from coal, and it is anticipated to expand further in the future. Moreover, in 2022, utility-scale energy-producing plants in the United States produced around 4.23 trillion kWh of electricity. This power was generated using fossil fuels. This includes natural gas, coal, petroleum, and other gases, about 60 %. At the same time, nuclear energy makes up about 18 % of the total, while renewable energy sources are about 21 %.

Europe is anticipated to propel at a higher CAGR during the forecast period. In December 2023, thermal coal imports into Europe hit an eight-month high as generators stocked up in anticipation of winter demand rises. Moreover, 3.1 million tons were imported this month by European nations. This is the largest since April 2023 and an increase of almost 0.4 million tonnes from November. Furthermore, power generation caused a 0.9 % rise in coal consumption to 448 Mt in the European Union. This offset the losses in non-power applications.

Asia Pacific is predicted to lead the steam coal market in the future. The Asian economies are experiencing a significant increase in electricity demand due to sustained economic growth. Moreover, coal is still perceived as an affordable option for baseload power. Also, it is expected to remain important in the region to meet the growing need. In addition, in 2023, China, India, and Southeast Asian nations are anticipated to use three of every four tons of coal used globally. Therefore, the market share of steam coal will expand in the coming years.

Latin America is estimated to register a positive growth rate in the steam coal market. Chile was the nation in Latin America that relied heavily on this fossil fuel. It accounted for about 34 % of its energy output. And Guatemala came in second place with a share of 21 %. However, the majority of Latin American and Caribbean nations did not use coal as a source of electricity in that year.

Middle East and Africa are expected to grow at a moderate pace in the steam coal market. The use of coal in the region is relatively limited. There is a stronger focus on oil and gas for energy production. However, South Africa has a significant coal industry. It is among the world's largest coal producers. In the Middle East, Turkey and Iran have notable coal reserves. But, the use of coal for energy is not as prevalent.

KEY PLAYERS IN THE GLOBAL STEAM COAL MARKET

Companies playing a prominent role in the global steam coal market include Mercuria Energy Group, Trafigura Group Pte Ltd, China Coal Energy Company Limited, Hind Energy and Coal Beneficiary India Limited, China Shenhua Energy Company Limited, Borneo Coal Trading, Vitol Holding BV, Glencore PLC, Centennial Coal Company Limited, Mitsubishi Corporation, RtM Japan Ltd., and Others.

RECENT HAPPENINGS IN THE GLOBAL STEAM COAL MARKET

• In January 2024, the State-owned South Eastern Coalfields and Mahanadi Coalfields received approval from the Indian Cabinet Committee on Economic Affairs (CCEA) to spend ₹5,607 crore in equity to establish two thermal power plants with a combined generating capacity of 2,260 MW.

DETAILED SEGMENTATION OF THE GLOBAL STEAM COAL MARKET INCLUDED IN THIS REPORT

This global steam coal market research report has been segmented and sub-segmented based on calorific value, volatility, and region.

By Calorific Value

• Low Calorific (5,500 kcal/kg and 6,000 kcal/kg)
• High Calorific (6,100 kcal/kg and 6,700 kcal/kg)

By Volatility

• Low volatile coal
• Medium volatile coal
• High volatile coal

By Region

• North America 
• Europe 
• Asia Pacific
• Latin America 
• Middle East & Africa