The international coal trade is entering a more challenging phase, but Australia’s coal industry continues to demonstrate resilience, particularly in the metallurgical coal segment, where demand fundamentals remain comparatively strong.
The recent Coal 2025 report by the International Energy Agency has provided an analysis of the global coal industry as it stands along with forecasts through to 2030.
The report said while thermal coal markets are under pressure from declining import demand in mature Asia-Pacific economies such as Japan, South Korea and Chinese Taipei, Australia’s exposure is increasingly balanced by its position as the world’s leading exporter of high-quality metallurgical coal.
Demand from India, in particular, is providing a crucial pillar of support, with steel production growth underpinning a more robust outlook for met coal relative to thermal markets.
Coal prices have softened amid weakening demand and global oversupply, squeezing margins across the sector.
However, prices are now moving closer to long-run supply costs, helping restore market discipline. Australian producers have responded by tightening cost control, prioritising higher-margin tonnes and managing output in line with market conditions, reinforcing the sector’s ability to adapt through cycles.
Domestically, coal-fired power generation is in gradual decline as renewables and LNG gain ground, but this transition is unfolding in a measured manner.
The report said coal consumption in Australia is forecast to fall modestly from 90 million tonnes in 2024 to 87 million tonnes in 2025, with electricity demand remaining stable.
Importantly, coal continues to play a vital role in ensuring system reliability as renewable penetration deepens.
On the supply side, Australian coal production remains predominantly export-focused and globally competitive. Despite weather-related disruptions, logistical constraints and regulatory complexity, government forecasts still place total coal supply at around 446 million tonnes in 2025. Major producers have demonstrated operational flexibility, adjusting output while preserving balance sheet strength.
The report noted that project activity remains selective but ongoing. Extension approvals at operations such as Boggabri, Lake Vermont, Caval Ridge and Ulan highlight continued confidence in long-life assets, while staged expansion at the Carmichael mine reinforces Australia’s ability to supply global markets when conditions allow.
Looking ahead, the composition of Australian coal output is expected to shift further towards metallurgical coal. Met coal’s share of total production is projected to rise from 34 per cent in 2025 to 38 per cent by 2030, reflecting sustained steelmaking demand and Australia’s structural advantage in premium hard coking coal.
