Seaborne coal trade in 2023 may well surpass the record of 1.3 billion tonnes set in 2019. Cheaper coal has made imports more attractive for some price-sensitive buyers.

Chinese imports have almost doubled in the first half of this year, and global coal trade in 2023 is set to grow by more than 7%, outpacing overall demand growth, to approach the record levels seen in 2019, the International Energy Agency (IEA) said in a new report on Thursday.

Global coal demand is set to hit a new record high in 2023, as coal demand grew by about 1.5% in the first half of 2023 to a total of about 4 665 Mt.

Last year, global coal demand increased by 3.3% to 8.3 billion tons—a new record-high, the agency said in its Coal Market Update.

This year, coal demand will stay near that record level this year as strong growth in Asia for both power generation and industrial applications outpaces declines in the United States and Europe, according to the IEA estimates.

In 2023 and 2024, small declines in coal-fired power generation are likely to be offset by rises in industrial use of coal, the report predicts, although there are wide variations between geographic regions.

“Whether coal demand in 2023 grows or declines, will depend on weather conditions and on the economies of large coal consuming nations,” the agency noted.

In China, demand jumped by 5.5% in the first half of 2023 compared to the same period last year, due to very low hydro output so far this year, the IEA said.

It is expected growth to slow slightly, mainly due to recovering hydropower availability after last year’s drought. However, the IEA sees China’s coal demand rising by about 3.5% in 2023, with demand from the power sector up 4.5% and demand from non-power uses growing by 2%.

By region, coal demand fell faster than previously expected in the first half of this year in the United States and the European Union by 24% and 16%. However, demand from the two largest consumers, China and India, grew by over 5% during the first half, more than offsetting declines elsewhere.

“Coal is the largest single source of carbon emissions from the energy sector, and in Europe and the United States, the growth of clean energy has put coal use into structural decline,” said IEA Director of Energy Markets and Security Keisuke Sadamori. “But demand remains stubbornly high in Asia, even as many of those economies have significantly ramped up renewable energy sources,” he added.