Article source: Reuters Chinese website

The International Energy Agency (IEA) said on Monday that global coal demand is expected to be depressed over the next five years, growing at an annual rate of just 0.5%, slightly higher than the current level due to the decline in Chinese demand.

Global coal consumption fell 1.9 per cent to 5.357 billion tonnes last year from a year earlier, as falling natural gas prices, a surge in renewable energy and improved energy efficiency depressed demand for coal, IEA said in its annual coal market report.

The agency expects global coal demand to grow at an average annual rate of 0.5 per cent by 2022, "only slightly above current levels, meaning that coal consumption has almost stagnated for about a decade".

Coal use in Europe, Canada, the US and China, the world's largest consumer of coal, will decline, but consumption in Southeast Asia, India, Pakistan and Bangladesh is expected to grow.

India's consumption is expected to grow the most, rising 3.3 per cent to 605 million tonnes year-on-year until 2022.

After peaking in 2013, China's annual consumption is expected to fall 0.1 per cent year on year to 2.787 billion tons by 2022, as the government's pollution crackdown has reduced industrial and household coal use.

Us coal consumption will rise slightly next year and then fall to 469 million tonnes by 2022. EU coal consumption is expected to fall to 293 million tons by 2022.

On the supply side, global coal supply is expected to grow by 0.8 per cent to 5.534 billion tonnes annually in 2020, mainly driven by supply from non-OECD countries.

The share of coal in the global energy supply structure is expected to fall to 26 per cent in 2022 and 27 per cent in 2016, the report said.

After years of decline, coal prices have continued to strengthen this year, supported by sharp cuts in coal production in China and strong demand in the Asia-Pacific region and Europe.

European API2 2018 coal futures are currently trading at about $90 a tonne because of rising demand in China and supply problems.

IEA said that despite high prices at the end of 2016-17, progress in the development of coal projects had been slow. Weak demand and uncertain prospects in China, India, South Korea and Japan have depressed investment.

Prices have risen over the past year because there is not much new supply.

[coal] prices continue to be largely dependent on China, so structural reform in China's coal industry is the key to the trend of coal prices. "the report says. (end)