Great Changes in Global Coal Industry

In recent years, the pattern of world coal production and consumption is evolving: under the dual background of fulfilling the requirements of the Paris Accord and promoting the energy transformation, western developed economies are gradually realizing low-carbon by increasing the proportion of natural gas and renewable energy in the power generation structure; on the contrary, Asian emerging economies are gradually realizing low-carbon. In recent years, with the rapid development of economy, coal, as a cheap and highly available energy, is increasingly increasing in its share of energy consumption. Overall, the pattern of world coal production and consumption continues to move eastward. The shale gas revolution in the United States has made natural gas more competitive than coal. In addition, renewable energy installations in the United States have accelerated in recent years, and wind and solar energy have squeezed coal-fired power's share in the power generation structure. As a result of the above reasons, coal consumption in the power sector has declined, and coal production in the United States has declined significantly in 2016. Since then, driven by exports, coal production in the United States has witnessed a "small spring" in 2017, but the boom is not long. Coal production fell again in 2018. The trend of "coal removal" in European countries is more obvious. Germany, as the proponent of "Energie Wende", has been playing the leading role in energy transformation - abandoning nuclear power from the beginning, and then putting forward the policy goal of "Coal Phase-out" by 2038. Germany has made great efforts for low-carbon transformation. In 2018, Germany withdrew from its last hard coal mine, and domestic lignite production was declining. In 2018, German renewable energy generated 228.7 terawatt-hours of electricity, an increase of 5.6% over the same period last year, while coal generated electricity decreased by 11% over the same period last year. Britain, on the other hand, has vigorously developed natural gas and offshore wind power and closed its last coal mine in 2015.

Corresponds to emerging economies in Asia such as India and Vietnam. The economy of these countries has maintained high-speed growth, and the degree of industrialization has continued to increase. These growth has become an important factor in driving coal consumption. As one of the most promising economies in the world, India has worked in both fossil and renewable energy directions in the past few years. From the production side, Coal India Limited (CIL), India's largest coal producer, has witnessed a rapid increase in coal production in recent years, approaching 570 million tons in 2018, and has leaped to become the world's largest coal producer. CIL has set a target of 1 billion tons of coal production in fiscal year 2020. CIL is only a microcosm of India's coal production. With the further development of industrialization and urbanization in the future, India's coal consumption demand still has a lot of room to grow. In recent years, Vietnam has made use of its "late-developing advantage" to attract foreign capital with cheap labor, stable government policies and large-scale local market, thus gaining a "place" in the global division of manufacturing industry. Because of the development of manufacturing industry, Vietnam's coal consumption has increased dramatically, from a net exporter of coal to a net importer, and the consumption gap has continued to expand. China is also an important force in the global coal pattern change. From 2017 to 2018, with the rising demand for coal consumption in China and the gradual release of high-quality production capacity, China's coal production gradually rebounded, which affected the world's coal production also began to rebound.

Power Coal: Economic recovery boosts consumption growth. Because power coal accounts for about 75% of world coal output, world coal output is mainly affected by the change of power coal output. After the low output in recent years, global power coal production began to rise in 2017, with a year-on-year growth rate of 4.9%. Although the growth rate of output in 2018 was somewhat narrowed, it still maintained a growth trend, with output reaching 5.98 billion tons. From the perspective of downstream consumption, Asian economies drive global power coal consumption. Among them, the growth rate of electricity consumption in China rebounded gradually after bottoming in 2015, which led to the consumption of power coal upstream. In terms of production, China's domestic output of power coal has increased for three consecutive years.

Similarly, due to the rebound of China's demand for power coal, the relaxation of import policy of power coal and the release of Indonesia's domestic coal production capacity, Indonesia's coal production increased rapidly from 2016 to 2018, reaching an annual compound growth rate of 8.8%. Its output jumped from 490 million tons in 2016 to 550 million tons in 2018.

In Asia, the industrialization and urbanization of emerging economies such as India and Vietnam accelerated, infrastructure investment and real estate construction continued to rise, and demand for power coal increased. In 2018, India's power coal consumption accounted for about 14.2% of the total global power coal consumption, an increase of 1.5% compared with 2015, while Vietnam's global movement. The proportion of total coal consumption increased from 9.0% in 2016 to 10.4%. Perhaps in the near future, we can see that Vietnam will replace Poland as the tenth largest power coal consumer in the world.

South Korea's overall economic development is relatively stable except for the large economic growth in the third quarter of 2017. From the energy production side, the current government of South Korea has clearly put forward the policy of "gradual withdrawal of nuclear power", announcing that more nuclear power plants will be stopped in the future. In recent years, nuclear reactor failures have occurred frequently in the country, and part of the power generation share is coal. Power substation substitution, so the annual composite growth rate of Korean power coal in 2015 - 2018 is 2%.

While Japan has turned to coal-fired power as an alternative in recent years due to the Fukushima nuclear accident in 2011, with the restart of nuclear power in 2017, the demand for power coal has fallen again, and Japan's share of world power coal consumption has dropped from 2.5% in 2015 to 2.3% at present.