Spencer Dale, group chief economist
World proved coal reserves are currently sufficient to meet 134 years of global production, much higher than the R/P ratio for oil and gas.
By region, Asia Pacific holds the most proved reserves (41% of total), split mainly between Australia, China and India. The US remains the largest single reserve holder (24.2% of total).
World coal production increased by 105 million tonnes of oil equivalent or 3.2%, the fastest rate of growth since 2011.
Production rose by 56 mtoe (3.6%) in China and 23 mtoe (6.9%) in the US. Interestingly, the increase in US production came despite a further fall in domestic consumption, with US coal producers instead increasing exports to Asia.
Global coal consumption grew by 25 mtoe, or 1%, the first growth since 2013.
Growth was driven largely by India (18 mtoe), with China consumption also up slightly (4 mtoe) following three successive annual declines during 2014-2016. OECD demand fell for the fourth year in a row (-4 mtoe).
After several years of free-fall, the coal market experienced a mini-revival last year, with both global consumption and production increasing. India (4.8%,) recorded the fastest growth, as demand both inside and outside of the power sector increased. China’s coal consumption (0.5%,) also ticked-up. This is despite the substantial coal-to-gas switching in the industrial and residential sector, as increases in power demand in China sucked in additional coal as the balancing fuel.
Coal prices rose in China, Japan, Europe and the US in 2017.
Spot market coal price in China reached a new historical high in 2017, chiefly because total output could not meet the rising coal demand. The effect of this increasing coal price in China spilled over into the rest of the world in 2017. The international seaborne coal market was booming the whole year.