Fuel coal market expected unchanged from 2025
In the coal market for power generation, both bullish and bearish factors are expected and prices are forecast to stay around the same level as 2025.

As for bullish factors, demand for coal is firm and supply decreased. According to the report by the International Energy Agency (IEA), the US shifted from high-priced liquefied natural gas to coal while power demand was increasing. Donald Trump took office as the US President, which also encouraged the shift as he promotes fossil fuels. In addition, in Europe, coal demand was firm as wind power and hydropower generation decreased and gas prices rose. This trend is expected to continue in 2026.

In China and India, which consume large volumes of coal for power generation, coal demand was stable or decreased in 2025 as economy slowed down and renewable energy was more widely used. But demand is forecast to increase in 2026. IEA said that demand from China was predicted to recover to reach near 5 billion mt in 2026. IEA also forecasts that demand would grow by 2.5% in India in 2026.

Further, since global environmental consciousness is heightening in recent years, coal production volumes have not increased, which also boosted the coal market. Some US and European Resource Major and traders are selling their coal interests and market players forecast that demand cannot be met owing to a production reduction. Even in major producing countries such as Australia and Indonesia, production is anticipated to decline.

With respect to bearish factors, renewable energy is rapidly used. In China, solar PV, solar thermal and wind power generation facilities are swiftly set up. Ini India, more solar PV and wind power generation is adopted. If renewable energy is widely used in coal consumption countries more than expected, demand for coal is likely to shift. Moreover, if countries become much more environmentally conscious and employ renewable energy, operations of coal thermal power generation would be halted first due to its large emission of CO2.

In 2025, the FOB Australia New Castle market for fuel coal started in the mid-$120's/mt. The market temporarily fell below $110/mt in the first half of 2025 on account of sluggish demand from China but gained in the second half of the year due to tight supply. The market was hovering around $100-110's/mt.