OPINION | Why seaborne coal has peaked despite resilient global demand

The headline news that global coal demand reached a record high in 2025 masks some important underlying shifts in how the fuel is being produced, traded and used.

The trend of coal production, shipping and demand shifting toward Asia has been in place for decades, but 2025 saw a shift insofar as less coal was shipped around the region even as more of the fuel associated with “climate change” was consumed.

A total of 1.09 billion tonnes of all grades of coal was imported from the seaborne market in Asia in 2025, down 4.4 per cent from the record 1.14 billion the prior year, according to data compiled by commodity analysts Kpler. The most important type of coal consumed in Asia is thermal, which is used mainly to generate power but also to produce products such as cement and bricks.

Asia's seaborne imports of thermal coal dropped to 860.5 million tonnes last year, down 4.6 per cent from the all-time high of 902.2 million, according to Kpler data.

The question for the market is whether the decline in 2025 is the start of a structural trend to a weaker seaborne market for thermal coal, or if it is merely a blip and coal will remain competitive given its cost advantage over alternatives such as liquefied natural gas.

The answer depends on what happens in the world's two largest coal producers, importers and consumers, namely China and India. There are two important trends at work in those giant energy markets, and they are likely to shape seaborne coal markets in coming years.