Coal Shipments to Advanced Economies Hit 23-Year Low as Decline Continues in 2025

By
Mfame Editor
-
9

BIMCO reported that coal shipments to advanced economies are set to fall again in 2025, marking a significant shift in global dry bulk demand patterns. According to Filipe Gouveia, this year’s volumes are expected to drop 2% year-on-year, reaching their lowest level in more than two decades. Although the decline is slowing, 2025 still marks the third consecutive annual contraction.

The latest figures show that weaker coking coal demand, driven by reduced steel production, remains the central pressure point. Between January and October, global steel output decreased 2.1%, while advanced economies experienced deeper drops: 3.4% in the EU, 4.1% in Japan, and 3.6% in South Korea. As a result, coking coal shipments to these economies fell by 10%.

Thermal coal flows present a mixed picture. After a notable 30% decline between 2022 and 2024, shipments have inched up 1% in 2025. This small recovery was mainly supported by higher deliveries to the EU, where rising electricity demand in markets such as Germany and the Netherlands coincided with weaker wind and hydro power generation. Meanwhile, Japan and South Korea maintained stable volumes as electricity needs from AI data centres and semiconductor manufacturing offset gains in renewables.

Advanced economies are forecast to account for 29% of global coal shipments in 2025, a dramatic fall from 77% more than two decades ago. Even so, they will still represent around 7% of global dry bulk cargoes, meaning their demand patterns continue to influence vessel utilization—particularly in the panamax and capesize segments. This year, 57% of shipments moved on Panamax vessels, while 30% were carried by capesizes. The Panamax sector has strengthened its competitive position, increasing its share by three percentage points compared to 2024.

Looking ahead, Gouveia noted that coking coal demand in advanced economies may stabilize or even recover next year. Europe’s steel demand is projected to grow 3%, supported by rising infrastructure and defence spending, and potentially reinforced by adjustments to EU steel tariffs or import quotas.

However, the medium-term trajectory remains shaped by structural change. Recycled steel production is steadily expanding, and this process does not require coking coal—indicating continued pressure on long-haul coking coal trades. Likewise, thermal coal demand is set for further contraction. Between 2025 and 2030, renewable energy capacity is forecast to grow 64% in Europe, 30% in Japan, and 49% in South Korea, steadily reducing imports of fossil-fuel-based energy commodities.

Gouveia concluded that these shifts will continue to weigh on dry bulk demand in the coming years, with the Panamax and Capesize markets feeling the impact most directly.

Did you subscribe to our daily Newsletter?

It’s Free — Click here to Subscribe!

Source: BIMCO