COAL shipments to advanced economies have fallen for the second year in a row, with demand for thermal coal falling most significantly, as demand for coal used in power generation continues to reduce.

During the first 10 months of 2024, coal shipments to advanced economies dropped by 6% year on year, with import demand falls in Europe being most acute, according to BIMCO shipping analyst Filipe Gouveia.

Coal imports by sea fell by 22% to Europe year on year due to an increased use of renewable energy for electricity production.

Shipments to advanced economies are now expected to reach their lowest levels in 15 years.

Nevertheless, coking coal, utilised for steel production, to advanced economies increased 1% on last year, even though steel production marginally decreased.

“Shipments to advanced economies are falling for the second consecutive year in 2024, but their share of global coal shipments has been falling for longer,” said Gouveia, who noted that in 2009, the last time the volumes were this low, advanced economies were the destination for 57% of global coal shipments, compared to only 30% today.

The volume loss so far in 2024 is equivalent to a 0.5% decrease in global dry bulk cargo, which is primarily affecting the capesize market.

Nevertheless, global coal shipments have still risen due to strong import levels from emerging economies.

Panamax and capesize bulk carriers are mostly used to ship coal to emerging economies, accounting for 53% and 33% of shipments respectively.

Gouveia said that between January and October, coal shipments on panamax ships fell by 2% year on year, while shipments by capesize bulkers fell 11% in the same period.

“The reduction in cargo volumes to Europe and a surge in capesize freight rates likely contributed to a comparatively higher use of panamax ships,” suggested Gouveia.

He expects both thermal and coking coal imports in advanced economies to continue falling due to decarbonisation, as investment in renewable energy and an increase in steel produced from recycled steel expands.

Gouveia said that import demand in emerging economies could also weaken soon.

“Both electricity generation from renewables and domestic mining in importing countries are on the rise. As decarbonisation efforts increase, global coal shipments are forecast to fall by 1%-2% in 2025,” said Gouveia.

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