22 Dec 2015

Coal demand forecast revised sharply downwards

12:14 pm on 22 December 2015

The International Energy Agency (IEA) has dramatically revised downwards its forecasts for coal demand.

It expects coal growth to be at 0.8 percent annually through to 2020, down from the 2.1 percent growth forecast a year ago.

It attributes the slide in growth rates mainly to falling demand in China, where infrastructure developments have stalled and the government has come under pressure to do something about its smog-choked cities.

This trend follows years of falling demand for coal in western countries, and has bankrupted several coal companies including New Zealand's Solid Energy.

The IEA said the trend could benefit the environment because coal was a greenhouse-intensive fuel.

It said the only growth areas for coal are in India and South East Asia.

In a related development, the price of oil is continuing to fall, with Brent crude slipping to well under a third of what it was 20 months ago.

That is expected keep downward pressure on New Zealand petrol prices.