Record Coal Demand Masks Shrinking Export Market
Global coal consumption reached a record in 2025, but surging Chinese domestic production and a shift toward industrial use triggered a sharp contraction in international trade.
Global coal consumption rose 0.7% to a record 166.0 exajoules in 2025, according to the latest Statistical Review of World Energy. However, the headline figure obscures a painful year for international coal suppliers. Seaborne trade dropped 3.1% to 35.3 exajoules as the market bifurcated between domestic industrial demand in Asia and a structural power-generation decline elsewhere.
China drove the trade contraction. While the country consumed 55.6% of the world's coal, its imports plunged 10.1% as domestic production rose 1.7%. This displacement devastated major exporters, with Indonesian shipments falling 7.4%, U.S. exports dropping 11.5%, and Colombian volumes plummeting 21.3%.
A notable divergence emerged between overall coal demand and coal-fired power, a critical metric for utilities and carbon markets. Global electricity generated from coal fell 0.3% to 10,511 terawatt-hours, driven by generation declines in China and India. The record consumption was instead propped up by non-power industrial uses like steel and cement manufacturing.
The geographic concentration of coal demand makes broad phase-out narratives irrelevant for commodity investors. The Asia Pacific region accounted for 83.2% of global consumption. Non-OECD nations now represent 85.2% of the market, growing at 1.9% annually over the past decade, while OECD demand continues to contract by 4.8% a year.
The United States proved the major exception to the developed-world decline. U.S. coal consumption surged 10.4% and generation jumped 13.1%, single-handedly accounting for a larger absolute increase than the entire world. However, this remains a cyclical bump within a structural downturn, with U.S. consumption still 62% below its 2005 peak.
For markets, the 2025 data confirms that global coal is no longer a unified tradeable story. Total energy demand grew 1.4%, outpacing coal and pushing its share of the global energy mix down to 27.7%. Investors must now treat coal primarily as a localized Asian industrial input rather than a global power-generation fuel.
