West Asia Conflict Drives Near-Term APAC Coal Demand Spike -- Rystad Energy
KUALA LUMPUR, June 8 (Bernama) -- Asia-Pacific (APAC) thermal coal demand hit a significant near-term surge, with an additional 150 million tonnes (Mt) of cumulative consumption projected through 2030, with roughly half expected to land in 2026 amid the ongoing West Asia conflict, according to Rystad Energy.
In a statement today, it said the surge driver is not a policy reversal but a supply gap, with a liquefied natural gas (LNG) shortfall of 35 Mt estimated this year.
“This is forcing gas-dependent utilities to run existing coal capacity harder, backed by regulatory cap removals across Northeast Asia,” it said.
Rystad Energy also expects incremental coal consumption in Asia to rise by close to 70 Mt in 2026 under a sustained tight-gas market scenario, driven not by large-scale new capacity additions but by existing coal-fired fleets running at higher utilisation rates.
It said coal-fired generation across Northeast and Southeast Asia has risen sharply as gas output retreats and global seaborne coal shipments to the region step up materially.
“Japan’s coal-fired generation grew 11 per cent even as gas output fell 13 per cent, and South Korean and Japanese coal imports are tracking more than 50 per cent and 20 per cent above year-ago levels for May, respectively,” said Rystad.
Rystad Energy coal research analyst Tonmit Talukdar said coal is stepping in when gas prices spike, supply tightens, or mothballed plants are briefly restarted.
He said the response remains more contained than in the 2022 Russia-Ukraine crisis, when disruptions to Russian gas supplies triggered a sharp surge in global coal demand.
“What we are seeing is not a coal comeback but a reality check for APAC’s energy transition.
“LNG price volatility has shifted costs without reversing the move toward cleaner energy, and thermal coal prices have responded to that tightness with cautious buying, stockpiling and a geopolitical risk premium rather than any structural change,” he said.
He added that until storage, grid flexibility, and firm low-carbon capacity scale sufficiently to cover peak demand and periods of low wind or hydro output, coal will continue to serve as the system’s fallback.
-- BERNAMA
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