Coal prices have been back in focus over the past few weeks, and to be frank, the move has been pretty hard to miss.
According to Trading Economics, coal finished last week at around US$144 per tonne.
That leaves the commodity almost 11% higher over the past month and around 39% above where it was a year ago.
The other thing worth looking at is demand.
Global coal consumption is heading for another record in 2026, despite huge amounts of money being spent on renewable energy around the world.
And coal still generates more electricity than any other individual source.
So, why is it having such a strong run again?
Why are coal prices climbing again?
A lot of it comes back to what’s happening in global energy markets.
The war in the Middle East has disrupted LNG shipments through the Strait of Hormuz and pushed gas prices higher.
Virtually no coal travels through Hormuz, but that hasn’t stopped coal from benefiting.
This is because when gas gets too expensive, some power generators will use more coal instead.
According to the IEA, demand has picked up across China, Japan, South Korea, and parts of Europe.
Supply has tightened a bit as well, with China stepping up mine safety checks and Indonesia cutting its 2026 production target.
The world is burning more coal than ever
The demand numbers are pretty eye-opening as well.
The IEA now expects global coal consumption to rise 1.2% to a record 8.94 billion tonnes in 2026.
That’s quite a turnaround, considering it was previously expecting demand to fall this year.
China is still by far the biggest user, with demand expected to come in at around 5 billion tonnes.
India isn’t exactly slowing down either.
Coal consumption there is forecast to rise 4.2% to around 1.35 billion tonnes this year.
Between them, China and India will consume more than 70% of the world’s coal.
Coal is still important
This is probably the part that gets overlooked the most.
In 2025, coal provided around 34% of global electricity generation, making it the largest individual source of power worldwide.
Natural gas was a distant second at around 21%.
Yes, renewables are growing quickly and are expected to overtake coal-fired generation during 2026.
But coal isn’t disappearing anytime soon.
The IEA still expects it to remain the world’s largest single source of electricity through 2030.
At the same time, worldwide electricity demand is forecast to grow 3.6% this year and another 3.8% in 2027.
The post Coal is still the king of global power. Here’s why appeared first on The Motley Fool Australia.
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