NEFT Research expects global thermal-coal demand to decline in 2027-2028
Global thermal-coal consumption is expected to decline in 2027-2028 as supply becomes abundant, NEFT Research partner Alexander Kotov told TASS. The forecast follows a volatile 2026 marked by disruptions in China, Colombia and South Africa, Indonesian export controls and higher shipping costs.
Supply surplus expected after a volatile 2026
Global thermal-coal consumption is expected to decline over the next two years as abundant solid-fuel supply weighs on the market, Alexander Kotov, consulting partner at NEFT Research, told TASS. The forecast points to a cyclical cooling of the global market in 2027-2028 after a period of renewed price volatility in 2026.
Global energy quotations rose in the second quarter of 2026 amid the continuing conflict in the Middle East. The crisis did not create a shortage of solid fuel, according to Kotov, but it affected the coal market indirectly by increasing the cost of maritime logistics. That support came alongside several supply-side disruptions affecting major producing and exporting countries.
China restrictions and export disruptions lifted Asian prices
Coal prices also rose after China restricted production following an accident at the Liushengyu mine and conducted subsequent safety inspections. Supply interruptions in Colombia and South Africa added pressure. From June 1, the Indonesian government began controlling the volume of coal exports, introducing another constraint for a market that depends heavily on seaborne supply.
Kotov said these factors brought volatility back to the Asian market. The resulting imbalance caused Asian thermal-coal quotations to jump sharply and exceed price levels recorded two years earlier. The forecast for 2027-2028 assumes that the conditions supporting quotations in 2026 will gradually fade rather than persist through the medium term.
Chinese output and Indonesian flows shape the outlook
NEFT Research expects a surplus to emerge after Chinese domestic production stabilizes and Indonesian export flows adjust to the country’s new regulatory mechanisms. Greater availability would reduce the support that temporary production limits and logistical disruptions provided to prices. In Europe, thermal-coal demand is expected to continue declining as new renewable-energy capacity enters operation.
The outlook remains important for Russian suppliers competing with coal from Indonesia and Australia. Kotov said Russian thermal coal continued to receive price support from the Middle East crisis and higher natural-gas costs. In Asian markets, however, the balance is shaped by the high price sensitivity of China, India and South Korea, alongside their current need to build precautionary inventories.
Turkey supports Russia’s western sales direction
Turkey remains the principal coal consumer on Russia’s western sales route, according to Kotov. Higher natural-gas prices have pushed the country to increase its consumption of Russian solid fuel. This provides a source of demand even as the broader European market reduces coal use.
The forecast therefore separates short-term price support from the medium-term consumption trend. Supply interruptions, export controls and expensive shipping lifted quotations in 2026, but the expected normalization of Chinese output and Indonesian trade flows would leave more coal available in 2027-2028. Producers and exporters will face a market in which competition intensifies while major Asian buyers remain highly responsive to price.