The global coal market faces growing headwinds, yet Australia's industry maintains its stability, largely supported by comparably solid metallurgical coal demand, according to Coal 2025 released by the International Energy Agency.

The report analyzing the industry through 2030 indicates that while thermal coal imports are contracting in several mature Asia-Pacific economies, Australia's standing as the leading global exporter of premium metallurgical coal provides an increasing counterbalance.

Particularly, demand from India serves as a critical support, where expanding steel production fortifies a more resilient outlook for metallurgical coal compared to its thermal counterpart.

Although sector-wide margins face pressure from moderated prices amid subdued demand and ample global supply, current pricing is noted to be approaching long-term production costs. Australian producers have adapted through enhanced cost discipline, a focus on higher-margin production, and output calibrated to market conditions, underscoring the sector's cyclical adaptability.

Domestically, the displacement of coal-fired power by renewables and liquefied natural gas proceeds gradually. The report forecasts Australia's coal consumption to decline from 90 million tonnes in 2024 to 87 million tonnes in 2025, with electricity demand holding steady.

Coal retains a crucial function in maintaining grid reliability alongside increasing renewable generation, the report said.

On the supply front, Australian production remains oriented toward exports and sustains global competitiveness. Despite weather-induced disruptions, logistical constraints, and regulatory complexity, total coal supply is projected to hover at around 446 million tonnes in 2025. Major operators have shown flexibility in managing production while maintaining financial resilience.

The report further observed that while new project development is cautious, activity continues. Approvals for mine extensions and phased expansions at several mines reflect sustained confidence in long-life assets and Australia's capacity to supply global markets as conditions warrant.

Looking forward, Australian coal output is anticipated to shift further toward metallurgical coal, with its share of total production expected to rise from 34% in 2025 to 38% by 2030, mirroring enduring steelmaking demand and the nation's structural strength in high-quality hard coking coal.