IEA: China's coal demand to rise 0.3% in 2024

Mysteel: China, the world's largest coal consumer, is expected to consume 4.898 billion tonnes of coal in 2024, up by a tiny 0.3% from a year earlier, according to the Coal Mid-Year Update issued by the International Energy Agency (IEA).

China's hydropower generation has been recovering this year from last year's exceptionally low levels and hydro, alongside the continued rapid deployment of solar and wind, should see growth in the country's coal use slowing down significantly this year, the report says.

However, for the country's coal use to go into reverse this year is unlikely, with the IEA forecasting 6.5% growth in the annual electricity demand.

China's demand for coal for the power sector is predicted to grow by 0.9% this year, even though high precipitation starting in April has increased the availability of hydropower and squeezed coal-fired power generation. In addition, the acceleration of renewable deployments, especially solar capacity, has contributed to this slower growth in coal use. "This (0.9%) would be the lowest growth rate since 2015," the report notes.

Meanwhile, in 2025, China's coal demand is expected to decline for the first time since 2016, the report says.

China's coal demand in the power sector is likely to decline by 1.1% next year, as power sourced from renewables is likely to outgrow demand, the IEA says. However, it cautions that the forecast depends on factors such as electricity demand, hydropower output and solar availability.

The report doesn't elaborate upon possible changes in coal demand for non-power applications next year but assumes there would be a reduction of 49 million tonnes for China's entire coal demand if "there are no remarkable changes" in the non-power sectors.

In 2023 in its use of coal, China recorded growth in power use of 8% and non-power of 2.5%, leading to total consumption of 4.883 billion tonnes of coal in 2023, a rise of 276 million tonnes from 2022, the report says.

In terms of supply, the IEA expects China's coal production to decline slightly by 38 million tonnes on year to 4.572 billion tonnes this year. It also expects China's coal imports to reach 498 million tonnes in 2024, compared with 474.47 million tonnes a year earlier.

Meanwhile, in the IEA's Electricity Mid-Year Update, China's electricity demand is expected to reach 9,882 billion kilowatt hour (kWh) this year and 10,498 billion kWh in 2025, compared with 9,283 billion kWh in 2023.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and BigMint.