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Global Coal Trade Faces Rare Back-to-Back Decline in 2025–2026
The global coal trade is forecast to shrink in 2025, marking the first drop since the Covid-19 shock of 2020, with another decline projected for 2026. According to new analysis by The Signal Group, if these forecasts materialize it will be the first consecutive two-year decline in seaborne coal trade in the 21st century—a potential turning point that could reshape dry bulk freight flows and vessel deployment strategies worldwide.
Demand Peaks and Signals of Slowdown
The projected slowdown follows a record global coal demand of 8.79 billion tons in 2024. The International Energy Agency (IEA) anticipates that consumption will plateau in 2025 before beginning to edge lower in 2026, signaling a structural shift in global energy use.
China, the world’s largest coal consumer, is already showing signs of softening demand. In the first half of 2025, Chinese coal consumption slipped 0.5% as electricity growth slowed and renewable generation gained market share. Coal-fired power generation fell 3% during the same period, though coal remains critical for system stability.
India’s power-sector demand also declined 2.1% year on year in the first half of 2025. However, the IEA still expects a 1.3% increase for the full year, with steel production sustaining long-term coking coal imports.
The United States stands out as an outlier among advanced economies. U.S. coal demand rose 12% in the first six months of 2025, driven by robust electricity needs and high natural gas prices.
Shipping Market Implications
For global dry bulk shipping, the contraction in coal trade threatens to reduce tonne-mile demand, particularly if Asian buyers rely more heavily on domestic coal production. Such a shift could force dry bulk owners to rethink vessel deployment and employment strategies.
Indonesia, the world’s largest coal exporter, has faced price volatility in 2025 after scrapping its minimum benchmark price rule in August. Shipments to China plunged sharply in the second quarter but rebounded during the summer as domestic supply disruptions tightened the market.
Australia and Russia are regaining ground in India’s import mix. Australian metallurgical coal shipments peaked at 4.4 million tons in June 2025, while Russian exports averaged above 2.5 million tons per month between June and August. Still, Indonesia’s July shipments sank to 7 million tons, one of the weakest monthly totals since 2022.
Longer-Haul Flows and Competitive Dynamics
Signal analysts suggest that longer-haul coal flows from South Africa and Colombia may help offset Asia’s growing domestic production. These longer routes could partially support tonne-mile demand even as overall coal volumes decline. However, the market outlook points to increased competition among exporters, with South African and Colombian suppliers vying to capture market share from Indonesia and other Asian producers.
“The key question is whether longer-haul flows from exporters such as South Africa and Colombia can offset the gradual erosion of Indonesia’s market share, and how this balance will influence tonne-mile demand going forward,”
analysts at Signal noted.
A Turning Point for Coal and Sea Freight
The prospect of two consecutive years of declining coal volumes underscores coal’s shifting role in global sea freight. Dry bulk owners may face tighter margins and altered trade patterns as cleaner energy sources continue to rise and as geopolitical and regulatory pressures reshape global energy markets.
Expert Shipping Solutions
For businesses that continue to rely on coal and bulk cargo transport, partnering with experienced carriers is critical. Anil Darya International L.L.C-FZ offers specialized sea freight services for bulk commodities, including safe and compliant handling of coal shipments across major global trade routes. With expert logistics planning and a focus on international safety standards, Anil Darya Shipping provides reliable solutions amid changing market conditions.
