BIMCO: Coal Shipments to Advanced Economies Hit 23-Year Low

According to the latest report from BIMCO, seaborne coal shipments to advanced economies are projected to decrease by 2% in 2025, touching a 23-year low. This marks the third consecutive year of decline, although the pace of the drop has slowed compared to previous years. The primary driver of this trend is weakening demand for coking coal as steel production growth stagnates.

Declining Steel Production Drags Down Coking Coal Demand

Data indicates that global steel production fell by 2.1% year-on-year between January and October. Consequently, coking coal imports into advanced economies have plummeted: the European Union (EU) is down 3.4%, Japan down 4.1%, and South Korea down 3.6%. This has resulted in a 10% drop in total coking coal shipments.

An Unexpected Bright Spot from Thermal Coal

In contrast to the deep 30% decline seen during the 2022-2024 period, thermal coal shipments recorded a slight 1% increase in 2025, mainly directed toward the EU market.

The driver for this increase comes from higher power demand in Germany and the Netherlands, combined with reduced output from wind and hydropower. In Asia, shipments to Japan and South Korea remain stable, supported by massive energy demand from AI data centers and semiconductor manufacturing activities.

Fleet Structure and Market Share

Advanced economies are expected to account for only 29% of global coal shipments in 2025, a significant drop from the 77% share seen 23 years ago. Nevertheless, coal will still comprise approximately 7% of total global dry bulk cargoes.

Regarding transport modes, year-to-date figures show that 57% of this coal volume is transported by Panamax vessels and 30% by Capesize vessels. Notably, the market share for Panamax vessels has increased by 3 percentage points, driven by better freight rate competitiveness.

Market Outlook: Short-Term Recovery, Long-Term Pressure

Coking coal demand could recover next year, particularly in Europe, where steel output is forecast to rise by 3% due to infrastructure and defense spending. However, the growth of recycled steel (utilizing electric arc furnaces that do not require coking coal) will limit long-term growth momentum.

For thermal coal, demand is expected to continue its downward trend. Renewable energy capacity is forecast to grow robustly by 2030: up 64% in Europe, 30% in Japan, and 49% in South Korea. This will continue to slash coal import demand and directly impact the demand for dry bulk vessels in the future.

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Source: Phaata.com (According to BIMCO / ContainerNews)

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