Coal price forecast: How will the price change in 2025 and beyond?

One of the world’s major commodities, coal, is a must-have resource in pretty much every country because it is widely used in a number of important industries. Its price depends on a number of factors, including geopolitics, energy consumption, and technical progress, so making coal price forecasts is no easy task.

This article provides insights into coal price performance and related news over the last years, explains what it depends on, how coal consumption trends are changing over the globe, and what to expect from the coal price in 2024 and further on.

Table of Contents

Coal Price Forecast Summary

Factors that Shape Coal Prices

Where Is Coal Used?

Historical Coal Price Performance

Coal Price Prediction 2025–2030: Experts’ Opinions

Conclusion

FAQ

Coal Price Forecast Summary

The coal price forecast indicates mixed trends, with thermal coal price forecasts showing modest declines, while coking coal prices are expected to remain volatile. Coal price prediction models suggest that thermal coal prices might experience downward pressure due to reduced need and increasing global coal consumption amidst the global energy transition.

India's demand growth and additional electricity demand could provide some support for the market. However, the prospects group predicts a sharp decline in prices, especially in the spot market.

Coal consumption will likely continue to rise in key markets like China, the world's largest coal consumer, and parts of the European Union, despite displacing coal with alternatives like natural gas and hydropower.

While coal will not disappear overnight, analysts from the Prospects Group at the World Bank suggest that the market will marginally decrease in prices year-over-year, particularly as investments shift away from fossil fuels. The coal price projection for the next five years suggests limited upside, with structural changes weighing on future gains.

Keep an eye on spot prices and long-term forecasts for key insights.

Factors that shape coal prices

The coal price significantly depends on demand in different countries. Here is what impacts it:

• Global economic growth drives industrialization and increased energy consumption. During upswings, industries require more energy, often sourced from coal. Conversely, economic downturns can lead to reduced industrial activity and a decline in energy demand.
• Stringent environmental policies and regulations, aimed at reducing carbon emissions, may favor cleaner energy sources over coal. Governments implementing policies such as carbon pricing, emissions standards, or renewable energy mandates can directly influence the demand for the asset.
• Advances in renewable energy, storage and efficiency can make alternative sources more cost-competitive. As cleaner innovations become more accessible and affordable, industries and power generators may shift away from coal.
• Political factors, including changes in government policies, international relations, and geopolitical tensions, can affect the stability of coal markets. Countries’ decisions may impact investments in the coal industry and influence the overall demand for coal. Coal competes with natural gas for electricity generation. When natural gas prices are low, it can become a more attractive option, leading to reduced demand for coal. Conversely, high natural gas prices may make coal a more competitive option.
• Infrastructure projects, such as construction and urbanization, drive demand for electricity, which is often met by coal. The demand for coal can increase in regions undergoing rapid development.
• Seasonal variations impact energy consumption patterns. Cold winters or hot summers increase the demand for heating or cooling, affecting the need for electricity generated from coal.
• The cost of extracting coal and transporting it to consumers influences its overall pricing. High mining and transportation costs can make coal less competitive compared to other energy sources.
• The increasing adoption of renewable energy sources, driven by advancements in technology and environmental awareness, can reduce the reliance on coal for electricity generation.
• International trade relationships and policies affect the flow of coal across borders. Changes in trade dynamics, tariffs, or trade agreements can impact coal exports and imports, influencing global coal markets.
• The implementation of carbon pricing mechanisms, such as carbon taxes or cap-and-trade systems, makes coal more expensive compared to low-carbon alternatives, influencing investment decisions and demand.
• Availability of funding and investment for coal projects affects coal production capacity and can influence the overall supply of coal, impacting its pricing and demand.

Where is coal used?

Among the various uses for coal, producing electricity is the most significant. The leftovers of dead flora buried beneath layers of dirt gave rise to this fossil fuel millions of years ago. The United States Geological Survey classifies coal into four categories based on how well it heats:

• Hard coal, or anthracite, is ranked highest. It has a low amount of volatile matter and a high percentage of fixed carbon.
• Bituminous coal is utilized to make steel due to its high heating value.
• Sub-bituminous coal, with a low to moderate heating value, comes in third. Both lignite and sub-bituminous coal are utilized to produce energy.
• Lignite coal (grade four) has a high moisture content and low heating value.

79% of the global coal trade accounts for thermal coal, often known as power station coal. It is burned to produce steam, which drives turbines connected to generators. Rotating generators then convert mechanical energy into electricity. This process, known as combustion, harnesses the energy released from burning coal to generate a significant portion of the world's electrical power.

The remaining coking coal is used in metallurgy primarily as a reducing agent in the process of extracting metals from their ores. During smelting, coal undergoes combustion, producing carbon monoxide, which reacts with metal oxides to form pure metal. Additionally, coal provides the necessary heat for these high-temperature processes. Its abundant carbon content facilitates the reduction of metal compounds, making it a vital resource in the production of various metals like iron and steel.

Historical coal price performance

In 2024, coal markets experienced notable fluctuations. Thermal coal prices, particularly at Newcastle, averaged approximately $140 per metric ton (t) in December 2024, reflecting a decline from earlier in the year.

Conversely, coking coal prices exhibited volatility, with Australian FOB prices averaging around $211/t in the 2024/2025 financial year, influenced by shifts in global request and supply dynamics.

China, the world's largest coal consumer, increased domestic production, impacting import levels and global coal consumption patterns. India's demand growth also played a role in shaping market trends.

The transition to sustainable energy, with a shift towards renewable sources like hydropower, exerted additional downward pressure on coal prices. Despite these challenges, coal remained integral to power generation in several regions.​

Average Monthly Coal Prices in 2024:

This table illustrates the negative trend in steam coal prices throughout 2024, while coking coal prices showed more stability, influenced by factors such as industrial demand and supply constraints. Understanding these trends is crucial for stakeholders navigating the evolving energy landscape.

Coal price prediction 2025-2030: Experts’ opinions

The coal price forecast for 2025 – 2030 suggests a gradual decline, influenced by the global energy transition and evolving market dynamics. The World Bank anticipates a 12% drop in coal prices in both 2025 and 2026, following a significant decrease in 2024.

This trend reflects a marginally decreasing market need, particularly in China and Europe, as renewable energy sources gain prominence. The thermal coal price forecast indicates a continued downward trend, with prices expected to remain above pre-pandemic levels due to persistent supply constraints.

In contrast, metallurgical coal prices may experience high volatility in the short term, driven by fluctuations in steel production and global economic conditions. Overall, the coal outlook points to a market adjusting to lower demand, with coal production adapting accordingly. These forecasts underscore the importance of monitoring market developments to navigate the evolving energy landscape.​

Projected Average Coal Prices (USD per metric ton):

Note: These figures are projections and subject to change based on market conditions.

Conclusion

Although coal is a critical resource in many countries, its price can undergo a serious drop over the coming years, but a lot depends on the region. It is anticipated that China and India will continue to industrialize and urbanize, so their needs for coal will only grow in the years to come.

Nonetheless, there has been a change in favor of greener coal technology, such as more efficient and carbon dioxide-emitting ultra-supercritical coal-fired power plants. Countries with the most advanced economies will adopt them, which will lower the need for coal in the US, the EU, and Australia.

FAQ

How have coal prices shaped up at the beginning of 2025?

At the start of 2025, coal prices have continued their negative trend, driven by a bearish trend, high global output, and energy transitions, with thermal coal averaging around $105/ton and coking coal near $205/ton.

What will the price of coal be in 2025?

By the end of 2025, coal prices are expected to remain under negative pressure, with thermal coal averaging around $102/ton and coking coal near $190/ton. These prices reflect reduced market need, the global energy transition, and the effects of high fluctuations in global coal markets.

How is coal expected to develop in the future?

Coal is expected to face a bearish trend in the future, driven by factors like the global shift towards renewable energy, a downtrend in key markets, and environmental policies. Thermal coal costs will likely remain stable but low, while coking coal may experience high fluctuation due to fluctuating industrial needs.

Additionally, global coal consumption is projected to decline, with regions like China and India transitioning to cleaner energy sources. However, short-term market fluctuations and geopolitical events could still affect coal prices, causing occasional spikes or volatility.

What is the coal supply in 2025?

As of early 2025, global coal supply remains robust, with production levels closely aligning with demand. In 2024, coal production stood at approximately 8.6 billion metric tons, maintaining stability compared to 2023.

What is the prediction for the coal market?

From 2025 to 2030, the coal market is expected to face a downward trend due to reduced demand, energy transitions, and stricter environmental regulations. Coal prices may decline, though volatility and regional need shifts could cause fluctuations.

According to the World Bank and the International Energy Agency (IEA), thermal coal prices are forecast to fall from around $102/ton in 2025 to about $90/ton by 2030, while coking coal may decline from $190/ton to $165/ton over the same period.