New Year, New Outlook: What to Expect From the Coal Industry in 2025
By Jack Shaw
Many statistics are related to the U.S. export and import of coal and global market reactions. Despite the somewhat contradicting numbers, the market appears to have a stable trajectory for the future.
The rising global coal consumption seems to be a promising outlook for U.S. thermal coal markets in 2025. However, that may be an overly optimistic view of the market’s performance over the next few years. Here’s what to expect in the coming year.
What Is the Global and Domestic Coal Demand?
According to Reuters, U.S.-based coal traders have seen the highest volume of thermal coal exports in six years, occurring during the first 11 months of 2024. Generating nearly $4 billion in revenue, it’s the highest volume of coal exports since 2018. Most were dispatched to China, a major consumer of U.S.-stocked thermal and metallurgical coal.
In addition, the U.S. Energy Administration expects the electric power sector coal consumption to increase domestically by 0.4%. That puts the total consumption at 371.1 million short U.S. tons (st) in 2025 compared to the year prior.
However, it’s also important to consider market prices, and while coal prices did see a 3% increase in October 2024, they declined in November. Some estimations claim they may drop more than 12% in 2025 and 2026, making prices much lower than they’ve been in a long time.
Not everyone believes that to be the case, however. CSX’s Kevin Boone explained to S&P Global that new stimulus measures in China have helped adjust coal prices. He thinks natural coal prices will stabilize above where they are currently.
It will be good news if that happens and coal prices stabilize, and market growth may be on the horizon.
What’s Going to Happen With Coal in 2025?
There are positive and negative outlooks on the coal market for 2025 and 2026, depending on where you look.
Here’s what’s known:
> Coal is currently being stockpiled in U.S. facilities, with deliveries to power plants expected to continue its downtrend. The current stockpile represents $6.5 billion of unused inventory, affecting storage costs.
> The domestic power plant coal demand has declined for the past 15 years.
> High power demand during winter cold and summer heat is seeing more reliance on renewables and gas — and less coal consumption. That trend is expected to continue into 2025 and 2026.
> Coking coal demand will be significantly influenced by world economics and events such as the Russia-Ukraine war, geopolitical tension, Trump-era trade tariffs, and foreign nation imports.
Due to its low sulfur concentration, sub-bituminous coal is preferred for power plants and energy operations. This has supported U.S. electric power generation at most plants since the 1990s. It is the primary type of coal being stockpiled and seeing fewer uses.
Coking coal, a bituminous coal, is used in blacksmithing or metallurgy on both a small and commercial scale. Countries that continue to need it for imports include China, India, Bangladesh, Thailand, Indonesia, and the Philippines. Most of these countries have seen coal imports increase over the last few years. While it’s uncertain what will happen, it is a viable estimate that these imports — and exports out of the U.S. — will continue. It’s one of the most common types of coal traded on modern markets.
Anthracite is the highest and best-quality coal. It’s high in carbon for combustion and low in impurities. The U.S. currently exports a small amount. Performance is generally impartial on market trends, at least as far as the U.S. is concerned, because of how little it exports.
What’s the Outlook?
Both positive and negative trends affect the playing field. Exports of certain types of coal will continue at exponential rates. World events and other actions may slow or even speed up those exports — like if China reimposes tariffs on U.S. coal imports. It did this in 2018 as a retaliation for Trump’s imposed tariffs on Chinese goods.
The U.S. coal stockpiles typically shipped to power companies are building up. There is a decrease in demand, lower prices, and rising storage, distribution, and usage costs. The less coal these companies use, the longer it has to be stored, leading to stalled production.
Prepare to see more volatility in the coal markets than expected. The good news is that the global consumption of coal should remain relatively stable due to rising electricity demand — despite the use of renewable and alternative sources. There have been significant increases in electric power adoption, like electric vehicle adoption for energy security, but no major disruptions are expected for the future of coal.
Coal consumption and domestic exports should continue relatively unhindered for at least the next few years, albeit with slight declines.
About the Author: Jack Shaw is the senior editor of the men’s lifestyle magazine Modded and has written extensively about electric vehicles, sustainable practices, and maintaining a green lifestyle through your everyday actions. His writing can be found in Green Living Journal, Packaging Digest, EcoHotels, and more. Connect with him via his LinkedIn.