Fossil fuel reserves, particularly coal, are estimated to deplete within a few years.
In the world of energy commodities, the outlook for coal prices in the coming years is one of stability with some downward risks. This is according to a recent analysis of the global coal market, which takes into account various factors such as demand uncertainties, geopolitical factors, and energy transition trends.
For coking coal, a key component in steel production, prices are expected to remain stable at around $180 per ton from 2026 to 2028. This prediction is based on a weak demand outlook driven by China's struggling steel sector, partially offset by some demand growth in India and Southeast Asia. Australian coking coal prices are forecast to stay around $200 per ton in 2026 and 2027, which is below the 2024 average of $235 per ton.
Global exports of coking coal fell slightly by 1.4% in early 2025 compared to the previous year, indicating subdued market activity. This trend is expected to continue as the energy transition gathers momentum, with renewables becoming increasingly competitive in the power generation sector.
Russian coal prices and demand are influenced by geopolitical factors, particularly the EU's plan to ban new Russian gas imports starting in 2026. While this ban targets gas, not coal, it could indirectly impact the Russian energy market and coal market dynamics in Europe. Russian coal exporters may face challenges maintaining or growing demand in European markets due to the energy transition and reduced imports of Russian energy more broadly.
Looking at the global coal market as a whole, the outlook is mixed but generally flat to declining. High global electricity demand will enable coal's share in the global energy balance to remain stable at around 26-27% in 2026-2027. However, the International Energy Agency (IEA) is less optimistic about the growth of coal demand, citing the shift to cleaner energy sources like wind and solar as a key factor in the decline of coal consumption in power generation in some regions.
In conclusion, the general outlook for coal prices globally and in Russia for 2025-2026 is stability with some downward risks. This forecast is subject to various factors, including geopolitical risks, economic risks, and the energy transition. As such, not all coal producers may survive under current conditions, according to NEFT Research. The main risk for increased coal consumption is a slowdown in economic growth rates, leading to a decrease in electricity demand. However, a limitation of supply could contribute to the recovery of coal prices, with the cost of a ton of coal potentially increasing in the second half of 2025 and 2026.
Science reveals that the energy transition is gathering momentum, making renewables increasingly competitive in power generation, which could indirectly impact the demand for Russian coal in European markets. This shift to cleaner energy sources, as highlighted by the International Energy Agency (IEA), is a key factor in the decline of coal consumption in some regions. In the realm of environmental science, research suggests that the energy sector's focus on reducing carbon emissions will continue to influence global commodity markets, including coal, potentially altering the financial landscape for industry players involved in coal production.
