GTHT has released a research report stating that geopolitical disruptions in 2026 may lead Europe and East Asia to involuntarily switch energy sources, which is likely to drive a recovery in global coal demand that year. Subsequently, for 2027-2028, against a backdrop of surging global electricity demand fueled by AI and extreme weather, coal demand is expected to re-enter a short-term upward cycle. The geopolitical conflicts in 2026 are merely accelerating the arrival of a tight balance in the global supply-demand equation. From a medium to long-term perspective, with demand continuously rising and trade volumes shrinking, the "marginal pricing" mechanism for global coal is becoming clearer. The central price level of coal is anticipated to keep increasing, leading to a strategically bullish outlook on global coal resources. GTHT's main viewpoints are as follows:
Price is determined by the margin; geopolitical issues in 2026 are hastening the impact on this margin. In commodity pricing, the price is never set by total volume but by marginal changes. For coal, this characteristic is particularly pronounced: out of a global production exceeding 9 billion tons, approximately 85% is consumed within regional markets. Only about 1.3 to 1.4 billion tons of seaborne traded coal genuinely participates in international price formation. This means that a market representing less than 15% of the total dictates the fluctuations and the central price level for global coal. The geopolitical conflicts since 2026 have not significantly altered the overall global supply and demand balance for coal. However, by disrupting seaborne trade flows, they have rapidly constricted the supply-demand dynamics within this "marginal market." Given the structure of inelastic supply and rigid demand, this marginal contraction is significantly amplified, prematurely intensifying the arrival of a tight balance in the global market.
The medium to long-term global coal supply-demand balance is also entering a state of tight equilibrium. Even completely disregarding the impact of geopolitics, the actual medium to long-term global coal supply-demand balance is experiencing a contraction in the marginal market. Looking at global coal supply, total volume is expected to maintain slight growth in 2025. For 2026-2028, if major internal consumption markets like China, India, and the US are excluded, supply in other global regions is likely to remain flat or show minimal growth due to advancing ESG policies. Conversely, on the demand side, geopolitical disruptions in 2026 are expected to force energy switching in Europe and East Asia, likely leading to a rebound in global coal demand for that year. Following this, in 2027-2028, driven by high global electricity demand growth from AI and extreme weather, coal demand may re-enter a short-term upward cycle.
More importantly, the global seaborne thermal coal market is tightening, and marginal price increases are lifting the global price center. The global trade balance sheet is even more critical, as it represents the market where the most marginal changes determining global coal supply and demand occur. Starting in 2025, with exports from major suppliers like Indonesia, Australia, and the US beginning to decline, the total volume of global seaborne thermal coal trade has already fallen by approximately 5%. In 2026, considering only the reduction in Indonesia's production quota, a further decline of over 5% in global trade volume is expected. The fundamental reason for the frequent occurrences of global power shortages starting in 2025 lies in the rapid growth of global electricity demand driven by AI and extreme weather, while structural bottlenecks on the supply side have not been effectively resolved simultaneously. Renewable energy, due to its instability, has failed to provide reliable support for steady electricity demand. Consequently, the demand for coal as the ballast of the global power system is likely to increase, driving the global coal price center onto an upward trajectory.
Regarding investment targets, it is recommended to focus on YANCOAL AUS (03668), which has a global market presence. For A-shares, leaders with volume growth potential over the next five years are recommended, including Yankuang Energy (600188.SH), China Shenhua Energy (601088.SH), China Coal Energy (601898.SH), Shaanxi Coal Industry (601225.SH), JinKu Coal Industry (601001.SH), and Huayang Energy (600348.SH). It is also advised to monitor US coal-related equities like Peabody Energy (BTU.US).
Risk warnings include geopolitical risks and global macroeconomic risks.