Coal shipments to advanced economies are projected to decline by 2% year-on-year in 2025, marking a 23-year low and the third consecutive annual drop. This decline, though slowing, is largely attributed to reduced demand for coking coal due to decreased steel production, as noted by Filipe Gouveia, Shipping Analysis Manager at BIMCO. The World Steel Association reports a 2.1% global decrease in steel production from January to October, with significant drops in the EU (3.4%), Japan (4.1%), and South Korea (3.6%), leading to a 10% decline in coking coal shipments to these regions.
While thermal coal shipments to advanced economies fell 30% between 2022 and 2024, they have surprisingly increased by 1% year-on-year in 2025, driven by higher demand in the EU. Increased electricity demand in Germany and the Netherlands, coupled with a drop in renewable energy generation, has supported this trend. However, shipments to Japan and South Korea remained stable due to rising electricity needs from AI and semiconductor industries.
Looking ahead, advanced economies are expected to account for 29% of coal shipments in 2025, down from 77% two decades ago, yet still representing about 7% of global dry bulk cargoes. The panamax and capesize segments have seen increased competition, with panamax ships transporting 57% of coal so far this year.
In 2026, coking coal demand may recover, particularly in Europe, as steel demand is expected to rise by 3% due to infrastructure spending. However, the medium-term outlook suggests slower growth in coking coal demand relative to steel production, as recycled steel becomes more prevalent. Additionally, thermal coal demand is set to decline further, with significant growth in renewable energy capacity anticipated in Europe, Japan, and South Korea through 2030.
Share it now
