December 21, 2022
2022 was a record-breaking year for coal in more ways than one. Volatile markets due to the Russia-Ukraine war, the global pandemic, wet weather patterns, and the policy challenges of the energy transition, all combined to deliver the extraordinary circumstances the coal industry now finds itself in. Below we reflect on the figures that staggered us this year.
1. US$457.12/t
In early September, this is the extraordinary spot price that Newcastle thermal coal peaked at. And it has spent much of the second half of this year above US$400/t. Consider that barely two years ago thermal coal prices were struggling to reach triple figures, and it’s not hard to see why Australian coal companies have been swimming in enormous profits. As the year comes to a close, we remain in the bizarre situation of thermal coal prices exceeding coking coal prices. And while most forecasters expect prices to start easing from these heights next year, they will likely remain elevated above historical averages for some time.
2. More than US$600/t
Metallurgical coal has returned below US$300/t in the latter half of 2022, affected by sluggish global steelmaking output. But back in April, Australian prime hard coking coal shot well beyond US$600/t, enabling met coal producers to rake in billions for the 2021-22 financial year.
3. AU$133 billion
This is how much Australian coal exports are set to earn in the 2022-23 financial year, according to the federal Department of Industry’s latest forecasts, with around 57% expected to come from thermal coal exports. In the 2021-22 financial year, coal exports earned AU$114 billion, with metallurgical coal accounting for most of those earnings.
4. US$2 trillion
This is the global windfall profit fossil fuel companies reaped due to this year’s energy crisis, in addition to their usual earnings, according to the International Energy Agency. Meanwhile, workers and ordinary citizens have struggled to pay their power bills.
5. 8.05 million tons
The International Energy Agency expects global coal demand for the 2022 calendar year to reach 8.05Mt, a record high and a 1.2% increase on 2021. However, the trajectory has been slowing, with global coal demand expected to plateau over the near future to 2025.
