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Coal production to reach all-time high in 2022

Oil&Gas Materials 18 December 2021 10:59 (UTC +04:00)
Coal production to reach all-time high in 2022

BAKU, Azerbaijan, Dec.18

By Leman Zeynalova – Trend:

Coal production is forecast to reach an all-time high in 2022 and then plateau as demand flattens, Trend reports with reference to the International Energy Agency (IEA).

“Coal production failed to keep pace with rebounding coal demand in 2021, especially during the first half of the year, cutting into stock levels and pushing up prices. In China and India, where coal shortages led to power outages and idled factories, domestic policies to ramp up production and reduce coal shortages were soon implemented, facilitated by the large presence of state-owned companies in production,” IEA report says.

The report shows that the main coal exporting countries were prevented from fully taking advantage of high prices by supply chain disruptions, such as flooding in Indonesian mines.

“Years of lower investment due to financing and bureaucratic restrictions also played a role. Outside China, most of the additional production in 2021 came from existing mines or reopened mines that had been idled during periods of low prices. Futures contracts for coal are trading well below spot prices, which is not conducive to investment. Beyond 2021, global coal consumption is set to revert to the pattern seen over the previous decade: declines in advanced economies offset by growth in some emerging and developing economies. After its brief rebound in the United States and the European Union in 2021, coal demand will resume its decline through 2024,” said the agency.

As for demand, IEA says that for most industrial purposes where coal is used, such as iron and steel production, there are not many technologies that can replace it in the short term.

“Based on current trends, global coal demand is set to rise to 8 025 Mt in 2022, the highest level ever seen, and to remain there through 2024,” the report reads.

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