Global coal demand expected to increase in 2026
Increased demand is due to rises in natural gas prices from the closure of the Strait of Hormuz.
The forecasted rise of 1.2%, to a global total of 8.94bln tonnes, comes from the International Energy Agency’s Mid-Year Update 2026, which reports that some countries have turned to alternative energy sources.
Coal use and demand had been decreasing in previous years.
Although the Middle East is neither a major producer nor consumer of coal, and barely any coal shipments pass through the Strait, the ongoing conflict has significantly reduced the number of liquefied natural gas (LNG) shipments.
The report finds this has encouraged higher electricity generation from coal in countries that have gas-fired power fleets and spare coal capacity, leading to greater coal use in Europe, Japan, South Korea and China, among others.
China has also reportedly increased its consumption of coal for producing chemical products, due to high oil prices.
Forecasts of a particularly strong El Niño weather pattern this year are also expected to increase coal demand in some major consuming countries in Asia, including India and Vietnam, due to higher cooling needs and lower hydropower output.
Following a record high in 2025, global coal production is still expected to be lower in 2026, reflecting a decline in China’s output after safety inspections were triggered by a major mine accident in May.
The higher demand and tight supply are said to be contributing to higher coal prices around the world.
