Coal shipments to advanced economies are expected to decline 2% year-on-year in 2025, reaching their lowest level in 23 years, according to BIMCO. This marks the third consecutive annual fall, though the rate of contraction has eased compared to previous years. The decline is largely attributed to reduced coking coal demand amid lower steel production.
Global steel production fell 2.1% year-on-year between January and October, data from the World Steel Association showed. Advanced economies, which depend heavily on coking coal imports, recorded sharper declines: steel output slipped 3.4% in the EU, 4.1% in Japan and 3.6% in South Korea. As a result, coking coal shipments to these markets dropped 10% during the same period.
Thermal coal shipments to advanced economies, which had fallen 30% from 2022 to 2024, posted a slight 1% rise in 2025 so far. The increase was driven primarily by higher deliveries to the EU early in the year as electricity demand rose in Germany and the Netherlands while wind and hydro generation declined. Shipments to Japan and South Korea held steady, supported by higher electricity needs from AI data centres and semiconductor manufacturing, despite growing renewable capacity.
Advanced economies are projected to account for 29% of global coal shipments in 2025, sharply down from 77% two decades ago. Yet they will still represent about 7% of global dry bulk cargoes. The drop in coal volumes this year has weighed particularly on panamax and capesize segments. Panamax vessels carried 57% of these cargoes so far in 2025, while capesize ships handled 30%, with panamax ships increasing their share due to intensifying price competition.
Coking coal import demand could see a rebound next year, especially in Europe. The World Steel Association forecasts a 3% increase in European steel demand on the back of higher infrastructure and defence spending, which could support higher steel production if the EU tightens steel import tariffs and quotas. However, over the medium term, coking coal consumption is expected to grow more slowly than steel output as recycled steel production expands— a process that does not rely on coking coal.
Thermal coal imports, meanwhile, are forecast to continue declining. Between 2025 and 2030, renewable energy capacity is projected to rise by 64% in Europe, 30% in Japan and 49% in South Korea, according to the International Energy Agency, further curbing coal demand.
