The Voice News: Coal prices, which have been recovering from a four-year low, are expected to rise significantly starting in 2027. This projection is based on increasing demand across Asia and a shortfall in new supply, according to analysts at a conference held this week in Jakarta.
Currently, the benchmark thermal coal price for Newcastle Futures has climbed to $105 per metric ton, up from $94 at the end of April. However, this is still the lowest level since 2021.
According to World Bank data, the average coal price in 2024 was $136 per ton. It is forecasted to drop to $100 by the end of 2025 and decline by another 5 percent in 2026. However, this trend is likely to reverse starting in 2027.
Gui Peh, Director at Capital Luck Investment, said that due to the Trump administration’s energy policies, coal prices could easily reach $120 per ton within the next three years. He pointed to Trump’s support for fossil fuels and his opposition to renewable energy policies.
The price of metallurgical or coking coal, used in the production of iron and steel, is also expected to rise in the medium term. After hitting a four-year low in March, the price of Australia’s premium coking coal rebounded to $186 per ton as of Thursday.
Kevin Li, an analyst at research firm McCloskey, noted that the price of coking coal is expected to significantly improve from 2027, potentially reaching $230 per ton for hard coking coal that same year.
As part of the global energy transition, international banks are gradually withdrawing funding from coal projects. Japan’s Sumitomo Mitsui Bank and Singapore’s DBS Group have already adopted such policies. Starting in 2025, DBS Group will cease financing clients involved in coal projects.
Despite strong government-led renewable energy initiatives and economic slowdowns, coal demand in China is expected to remain robust until 2027, said Amy Dong, Senior Consultant at Shanghai Metals Market. She added that coal will continue to be the primary source of electricity generation in China for the foreseeable future. Dong also cited a similar trend in India, the world’s second-largest coal consumer, where government-led infrastructure projects are expected to drive demand.
Vasudev Pamnani, Director of India’s iEnergy Natural Resource, stated that India’s coal demand is projected to grow from 1.3 billion tons to 1.8 billion tons by 2030. Similarly, rising populations and economic growth in countries like Vietnam and Indonesia are driving up electricity demand, which in turn is increasing coal consumption.