11 September 2026
Britain's electricity grid requires urgent and wide-ranging upgrades if the government is to deliver on its promises to bring down energy bills and achieve a clean power system by 2030, the National Audit Office (NAO) has today warned, as it raised concerns that the timetable for delivering new pylon projects looks "very challenging".
The government spending watchdog said the nation's transmission grid needs to be upgraded and expanded to accommodate increasing amounts of renewable energy generation, but the pace of work to deliver new projects urgently needs to accelerate to avoid rising costs being passed onto consumers.
In a new report the NAO highlights how so-called 'constraint costs' - when power generators such as wind turbines or solar farms are paid to turn off to avoid overloading the grid during periods of peak generation - are already costing billpayers billions of pounds a year and the costs are expected to rise further in the near term.
These costs totalled £1.9bn in 2025-26, but could increase to £7.8bn a year by 2030, unless more concerted action is taken to upgrade power grid infrastructure and ensure the electricity generated by Britain's wind and solar farms does not go to waste, the NAO said.
Ofgem estimates around £70bn of investment is required between 2025 and 2031 to upgrade Britain's power system and deliver new transmission lines, energy storage capacity, and flexible grid services that can ensure less clean energy is wasted. The regulator claimed such investment could quickly save consumers money compared to the increased grid constraint costs that would occur if grid projects are not accelerated.
However, the NAO today warned that many grid upgrades are at risk of not being delivered when needed, which it said could push up energy costs for homes and businesses.
The National Energy System Operator (NESO) has identified around 80 grid and infrastructure upgrade projects that it claims are necessary for achieving a clean power system by 2030, but as it stands only 64 of these are currently ongoing.
Moreover, most of these projects are at an early stage of development and are not expected to be connected to the grid "by the dates NESO originally said would be optimal for keeping constraint costs down between now and 2030", the report warned.
The NAO said NESO had identified three projects in particular that need to be accelerated to help support the government's clean power 2030 mission, but "there has not been a significant acceleration in any of these projects so far".
Most of the grid upgrades NESO recommended were chosen because they were already in development, but in the absence of an integrated plan or whole-system appraisal, the government "has not demonstrated that these projects represent the best way of achieving its objectives", the NAO argued.
As such, the report recommends the Department for Energy Security and Net Zero (DESNZ) works together closely with Ofgem and NESO to strengthen oversight of the grid upgrades that are needed and improve transparency over the cost and progress of each project.
"While DESNZ, Ofgem and NESO have started to improve the way they work together, the planned upgrades of the electricity grid will test systems not designed for activity at this pace or scale," said Gareth Davies, head of the NAO. "Value for money now depends on delivery. Failure to implement these necessary grid upgrades will hamper economic growth as well as increase consumer bills."
For its part, the government has been taking action alongside Ofgem and NESO to accelerate grid development, improve support for energy storage projects, and reform the grid connection process, amid long-standing concerns that energy users and generators alike are too often forced to wait years - sometimes even a decade - to be given the green light for projects.
Last autumn, NESO published an updated timeline for its grid connection reform process, setting out an ambition to unclog a bottleneck of 750GW of projects in support of the UK's 2030 Clean Power Mission. Then in June this year, NESO revealed it has offered grid connections to 700 shovel-ready energy generation projects, which would represent roughly half of the capacity needed to deliver the 2030 clean power grid target.
Responding to the NAO report, Energy Minister Michael Shanks, said its warnings were "another stark reminder of the cost of years of historic underinvestment in the grid".
"As the National Audit Office recognises in its report, our once-in-a-generation reforms are finally building the infrastructure we need: reducing our dependence on the fossil fuels that leave households exposed to price spikes and helping lower people's bills for good," he said.
Lawrence Slade, chief executive of the Energy Networks Association (ENA), said NAO's analysis showed upgrading the grid is "vital" for cutting energy bills, strengthening energy security, and boosting the economy, but further reforms were still needed to meet ambitions for 2030.
"Long standing Clean Power 2030 targets have helped provide a stable framework for the upgrade work, though from the outset the challenging timescales were seen as possible only through close partnership between government, industry and regulators," he said.
"Though connections are accelerating, further reform of the planning system is required to allow network operators to go further and faster in work to support achieving these goals."
Tone Langengen, director of energy at the Tony Blair Institute (TBI) - which has been a vocal critic of the government's approach to energy policy and the net zero transition - reiterated her calls for a relentless focus from the government on cutting energy bills for consumers.
"Britain's built one of the most expensive energy systems in the developed world," she said. "That's why, while we support the government's net zero 2050 target, cheaper energy must be prioritised over clean energy for 2030. It's imperative every energy decision is taken through one test: does it cut costs for British families and industry?
"The grid should be modernised, and red tape slashed in the planning system, so new energy projects can connect faster and infrastructure can keep up with demand. NESO also needs a stronger focus on keeping costs down, using AI and smarter tech to cut the billions wasted every year through net zero delivery."
The report follows repeated warnings from a number of leading energy companies, including Octopus Energy, that more needs to be done to accelerate the delivery of grid projects and curb constraint costs, including through reforms to incentivise more demand in areas where there is surplus power available.
The government controversially rejected proposals for sweeping energy market reforms to introduce a system of zonal pricing that would allow for lower power prices in regions such as Scotland where there is routinely surplus clean power available. However, it did promise a review of alternative policies that could encourage greater demand closer to renewables projects and the more rapid roll out of energy storage projects that can store surplus clean power generated during peak periods.
The report will also spark fresh criticism from the Conservatives, Reform, and some media outlets, which have argued the pursuit of clean power and the UK's net zero targets are pushing up energy bills.
However, analysts and campaigners have argued that while rising constraint costs need to be addressed they should begin to fall as new grid projects come online, while renewables generation is serving to dampen rising energy costs by curbing costly fossil gas imports and reducing the amount of time that gas sets wholesale power prices.
Liquefied natural gas carrier LNG Mars berthed at a facility operated by Inpex in Darwin Harbour, Darwin, Australia, September 3, 2026. REUTERS/Helen Clark
Australia has revised a proposed rule that would have required natural gas exporters to keep 20% of their output for the local market. Instead, exporters will now need to reserve up to 20% based on decisions made by the energy regulator. This rule aims to ensure an oversupply of 110% of the estimated demand for the east coast gas market, which has struggled with shortages for nearly ten years. Supply issues have arisen due to declining offshore gas production from Victoria, and some liquefied natural gas (LNG) producers on the east coast have purchased domestic gas to meet their export commitments.
The Energy Minister, Chris Bowen, stated that the aim of the policy is to make gas more affordable and maintain a modest oversupply in the domestic market. The amount reserved for domestic use will be set by the Australian Energy Regulator (AER). The implementation of this scheme has been delayed by six months and is now set for January 1, 2028, without affecting existing export contracts. The bill proposing this policy will be presented to parliament later this year.
Australian Energy Producers (AEP) supported the changes but cautioned that oversupply could harm local markets by lowering prices and deterring new gas supply development. The three major LNG export projects operated by Origin Energy, Shell, and Santos will be impacted by this reservation scheme. Despite some relaxation of the rules, the government insists that producers must provide a specific percentage of their output to the local market.
The updated plan includes a 15% domestic reservation requirement in Western Australia and mostly exempts the Northern Territory. Resources Minister Madeleine King explained that domestic supply obligations will vary by region based on local market conditions. Some analysts believe the update clarifies the situation, while concerns remain that the policy could lead to local oversupply, affecting future exploration.
With information from Reuters
https://moderndiplomacy.eu/2026/09/10/australia-eases-gas-reserve-rules-lng-exporters/
HSBC Raises 2026 Brent Forecast to $90 as Hormuz Crisis Persists
HSBC has raised its projection for Brent Crude in 2026, lifting it to $90 per barrel from an earlier $80, as the Strait of Hormuz crisis keeps markets tight and no obvious route toward de-escalation has emerged.
According to analyst Kim Fustier at the bank, a note cited by The Wall Street Journal says oil markets are not expected to find balance until roughly the midpoint of 2027. For the near term, HSBC's base case envisions a delicate arrangement between the United States and Iran that could easily fracture, creating uncertainty around matters such as shipping security and insurance.
Fustier projects that crude flows through the Strait of Hormuz will climb to roughly 8 million barrels per day by the close of 2026, compared with 6 million bpd at present. That figure sits below certain other analyst estimates and current tracking data, which indicate around 10 million bpd of crude and petroleum products are presently moving through Hormuz. Even accepting the 10 million bpd figure, it amounts to only half the pre-war volume of roughly 19-20 million bpd that once passed through the chokepoint each day.
HSBC anticipates a gradual increase in Hormuz oil flows to 9.5 million bpd by the middle of 2027, per Fustier, a trajectory that would keep oil markets tight for close to another year. This expectation supports the bank's upgraded 2026 Brent Crude forecast of $90 per barrel.
In early Thursday trading, Brent Crude stood near $101 per barrel, after crossing the $100 threshold on Wednesday for the first time since July amid an escalating U.S.-Iran tanker conflict. Under HSBC's stalemate scenario, where diplomacy collapses and flows remain constrained at current levels, Brent could spike to $120 per barrel. While that is not the bank's base case, it aligns closely with a warning issued earlier this week by Goldman Sachs that oil could reach as high as $120 per barrel should attacks on Middle East shipping worsen.
https://www.indexbox.io/blog/hsbc-raises-2026-brent-forecast-to-90-as-hormuz-crisis-persists/
Erbil, Iraq: The US-led anti-jihadist coalition has begun withdrawing from Iraq’s Kurdistan region ahead of a deadline to end their mission in the country, a Kurdish official said Thursday.
They had already completed their withdrawal from other bases in Iraq in January and are now only present in the northern autonomous Kurdistan region.
They are scheduled to complete their withdrawal by September 30, having concluded their mission against Daesh in Iraq, according to a 2024 agreement between Baghdad and Washington.
“Under the existing agreement, these forces must leave by the end of September, and they have in fact already begun doing so,” Kurdistan’s interior minister Rebar Ahmed told journalists.
“The process has started also in the Kurdistan region, with those forces transferring daily to other locations outside Iraq,” he added.
A senior Iraqi official confirmed to AFP that coalition forces had begun withdrawing from Kurdistan, and were now only deployed at Erbil international airport.
The coalition forces exited Syria earlier this year.
The US-led troops deployed to Iraq and Syria in 2014 to fight IS, which had seized large swathes of both countries and committed massacres and other atrocities.
The group was defeated in Iraq in 2017 and in Syria in 2019.
Although members of the jihadist group remain in desert and mountainous areas, their attacks have massively declined, and Iraqi forces continue to launch operations against them.
The presence of the coalition, especially after Daesh’s defeat, has been a persistent point of contention between Iraqi authorities and Tehran-backed armed factions in the country.
For years, the Iran-backed groups have targeted coalition troops, most recently in support of Tehran during the Middle East war that began in late February.
Since taking office this year, Prime Minister Ali al-Zaidi has pledged to ensure the state’s monopoly over weapons and that the armed factions will hand over their arms to the state.
While some factions have said they would join state institutions, others are refusing, citing the continued presence of foreign troops.
Authorities have also set September 30 as a deadline for the factions to hand over their weapons, in the hopes that the coalition’s withdrawal would remove any pretext for keeping them.
Silver (SI=F) December futures opened at $67.94 per ounce on Thursday, September 10, 2026, down 1.0% from Wednesday's closing price. Silver prices are backing off this morning, reaching $66.62 as of 6.58 a.m. ET.
Even though the opening silver price was down 1% from the previous session's closing price, silver's $67.94 was the precious metal's strongest opening price so far this week. However, silver prices do seem to be backing off this morning in early trading.
Investors are awaiting the Producer Price Index (PPI) and Consumer Price Index (CPI) data due today and tomorrow, respectively, for one final look at prior inflation data before the Fed meets for its two-day rate-setting meeting starting on Tuesday.
Currently, there's a 62.2% expectation that the Fed will raise rates next week, which could further limit silver price growth in the short term.
Current price of silver
The opening price of silver futures on Thursday, September 10, 2026, was 1.0% lower compared to Wednesday's closing price. Here's how today's opening silver price has changed versus last week, month, and year:
Copper futures on the COMEX exchange reached a record $6.87 per pound this week, approximately 19% higher than at the start of the year. On the London Metal Exchange, the price rose to a record $14,800 per metric ton. As MarketWatch reports, the U.S. price was equivalent to about $15,141 per ton, reflecting the premium U.S. buyers are willing to pay as they stockpile supplies ahead of the possible introduction of import tariffs by President Donald Trump.
Demand from electrification and AI
Oroco Resource Corp CEO Charlie Kraier believes that electrification and the development of artificial intelligence infrastructure are long-term drivers of copper demand. According to him, data centers being built by major U.S. technology companies, including Amazon, Alphabet, SpaceX and Meta, require significant volumes of the metal primarily for electricity distribution.
Oroco Resource, headquartered in Vancouver, owns the Santo Tomas copper asset in northwestern Mexico. The company expects to begin production there in 2032. The resource contains about 1 billion tons of copper ore, and its projected operating life is 20 years. Following a preliminary economic assessment conducted in 2024, Oroco plans to publish a preliminary feasibility study in 2027.
Supply may not keep up with demand
Kraier also pointed to declining copper grades in ore, a lack of major new discoveries and reduced capital expenditures in the industry. In his assessment, bringing a new mine online can take from 15 to 20 years, while higher interest rates complicate financing for large-scale projects.
He also cited a shortage of sulfuric acid, which is required for the operation of some copper mines. According to data cited in the article, about 50% of global sulfur supplies pass through the Strait of Hormuz to global markets.
The International Energy Agency forecasts that global copper demand could reach 42 million tons per year by 2040. A Bernstein Private Wealth Management report published in July estimates the potential shortage at up to 12 million tons. S&P Global, in turn, forecasts a 24% gap between demand and supply by 2040, which could become significant after 2035.
At the same time, Kraier warned that the U.S. abandoning tariffs, the restoration of peace in the Middle East, or a sharp cooling of interest in AI could trigger a noticeable decline in prices. Oroco currently uses a long-term copper price of $4 per pound in its financial models.
Shares of U.S. copper giant Freeport-McMoRan (FCX) plunged nearly 8% in early trading Thursday, falling to $70.43 and dragging the entire copper mining sector lower. The catalyst was a report that the White House has not yet decided whether to impose tariffs on refined copper, causing the scarcity trade that had pushed copper prices to record highs to unravel within minutes.
The selloff spread rapidly across the sector. Southern Copper (SCCO) fell 7% to $195.66, while Canadian miner Teck Resources (TECK) also dropped 7% to $65.08. Both stocks had surged on Tuesday alongside record copper prices and are now giving back most of the gains accumulated this week. The Global X Copper Miners ETF (COPX) fell 7%, with its three largest U.S.-listed holdings leading the decline as the entire basket was repriced. By comparison, the SPDR S&P 500 ETF Trust (SPY) fell only 0.41%, underscoring that today's losses are highly concentrated in copper-related names rather than the broader market.
Three-month copper on the London Metal Exchange (LME) fell 3.1% to $14,312 per tonne, after touching a record high of $14,875 earlier in the same session. The reversal came after a media report citing two people familiar with the matter said the White House has not yet made a decision on tariffs covering refined copper. Officials are weighing the trade-offs: higher copper prices could push up manufacturing costs, but encouraging expanded domestic mining also carries benefits.
Precious metals also moved lower. A stronger U.S. dollar, U.S. crude oil prices above $100, and rising inflation-adjusted Treasury yields all weighed on the broader metals complex.
Tariff Expectations Were the Core Pillar of the Rally
Expectations of tariff action have been a key driver of the copper rally. The market had anticipated that the United States would impose tariffs on refined copper, prompting metal to flow from global warehouses into the U.S. and building a scarcity premium into physical prices. Once that expectation wavered, the premium evaporated within minutes. This is why a policy update with no actual operational content could reprice the entire mining sector so rapidly.
Copper prices had just set a new record earlier this week, and Freeport-McMoRan shares surged on Tuesday alongside the metal's gains. As a result, much of what is being given back today was accumulated in just a single week.
https://finance.biggo.com/news/dc94404e-128f-4fca-9a7c-0ffb83a4d97d
Molybdenum market update on September 9, 2026
The overall domestic molybdenum market maintained a firm operation. Although downstream users' willingness to inquire and purchase has declined compared with the previous period and price-cutting sentiment remains unabated, suppliers' quotations remained basically stable.
Today, the quotation for molybdenum concentrate was RMB 5,440/ton-degree, ferromolybdenum was RMB 341,000/ton, and ammonium tetramolybdate was RMB 327,000/ton. Under this market condition, market order volumes were limited, and industry participants had average confidence in the future market.
From the perspective of bullish factors, first, tight spot market supply and relatively high production costs have resulted in low willingness of most suppliers to make price concessions; second, the recent continuous warming of the international molybdenum market supports the firmness of domestic molybdenum product prices; third, the good development trends of downstream molybdenum industries such as new energy, semiconductors, and national defense have resulted in relatively large market demand for molybdenum products.
From the perspective of bearish factors, first, steel tender prices are relatively weak, at around RMB 339,000/ton, making it difficult for intermediate smelting enterprises to raise quotations; second, rigid demand from end customers has shown no improvement, coupled with unclear future market expectations, further constraining price increases.
In terms of news, data from the China Iron and Steel Association shows that in late August 2026, key monitored steel enterprises produced a total of 20.74 million tons of crude steel, with an average daily output of 1.885 million tons, decreased by 4.0% month-on-month in daily output. By region, the daily output of crude steel in North China decreased by 30,000 tons, in East China decreased by 31,000 tons, in Southwest China decreased by 7,000 tons, in Central South China decreased by 19,000 tons, and in Northeast China increased by 5,000 tons.
Price of molybdenum products on September 9, 2026
http://news.chinatungsten.com/en/tungsten-product-news/175495-tpn-16291.html
By Arman Sidhu
Key Takeaways:
Copper traded at a record $14,533 per ton on the London Metal Exchange on September 7, extending a rally of roughly 17 percent over the past year. Concurrently, the benchmark fee that smelters charge miners to convert concentrate into refined metal stands at zero for 2026, the lowest annual settlementon record. The two figures describe a single condition: the value in copper has moved decisively toward whoever controls the ore, and the processing stage now generates no independent return. The inversion is generally reported as a margin problem for smelters. The same figures also document where control over the copper supply chain has settled, and how China has used excess smelting capacity to secure that position.
How the Benchmark Reached Zero
Treatment and refining charges (TC/RCs) are fees that miners pay smelters when selling concentrate, a semi-processed ore containing roughly 25 to 35 percent copper. In December 2025, Chile’s Antofagasta agreed to 2026 charges of zero with a Chinese smelter, down from $21.25 per ton and 2.125 cents per pound the prior year. Spot charges fell further, reaching approximately minus $127 per ton by the end of June 2026, which means smelters are paying miners for the right to process their material.
The proximate cause is capacity. China accounts for roughly half of global smelting and more than 90 percent of the growth in smelter output since 2005. Mine supply has not kept pace, and the result is a bidding contest for concentrate in which Chinese plants set the clearing price.
Why Chinese Smelters Can Absorb a Zero Fee
A zero benchmark would ordinarily force closures. Chinese smelters have continued operating because their economics rest on by-product revenue, physical premiums, and state tolerance for thin margins. Smelting produces sulphuric acid, gold, and silver alongside refined copper, and these credits can cover most operating costs when acid prices are elevated. Refined copper also sells at record physical premiums, in many cases above $300 per ton, which further cushions the plants that produce it.
The Kamoa-Kakula smelter in the Democratic Republic of the Congo illustrates the arithmetic. Its second-quarter operating costs averaged $0.41 per pound and were largely offset by $0.39 per pound in sulphuric acid credits, with third-quarter acid contracts priced near $840 per ton, roughly double the second-quarter average. Chinese plants operate under similar conditions, with the additional advantage of state-linked financing that does not require a commercial return on the processing stage.
Beijing’s response to the fee collapse confirms that it intends to keep its overcapacity in place. China’s largest smelters agreed to cut 2026 output by more than 10 percent, and the government halted roughly 2 million tons of planned new capacity. Early production guidance points to limited implementation, since Jiangxi Copper and Yunnan Copper both raised their 2026 targets after the cut was announced. These measures ration the existing base without reducing China’s share of global processing, and the International Energy Agency has assessed that they are not enough to rebalance the market.
The Geopolitics of a Shrinking Alternative
The strategic consequence falls on the smelting nations outside China. On October 15, 2025, the industry ministries of Japan, Spain, and South Korea issued a joint statement on TC/RCs warning that growing dependence on specific countries for smelting is undesirable for producers and processors alike. JX Advanced Metals and Mitsubishi Materials have since announced plans to scale backconcentrate processing, and Mitsubishi intends to cut primary smelting by 30 to 40 percent by fiscal 2035.
Each exit outside China raises China’s share of global refining and narrows the number of buyers to which a mine can sell concentrate. The precedent is rare earths, where concentration of processing capacity preceded export licensing controls by roughly two decades. Copper processing has not yet been used as an export lever, and the capacity to do so now exists.
Producer Responses and the Timing Gap
Producing states have begun building their own smelters. Codelco selected Glencore to develop a 1.5 million ton smelter in Chile’s Antofagasta region, with a pre-feasibility study as the next gate and operations targeted for 2032 to 2033. The Democratic Republic of the Congo issued an order dated June 29, 2026, banning exports of copper and cobalt concentrate, the fourth such restriction since 2013. The direct volumes are modest, since Congo already refines most of its copper domestically and retains authority to grant waivers, yet copper rose toward its January record when the order became public in August, a reaction that measured the market’s sensitivity to producer-state restrictions more than the tonnage involved.
These measures remove concentrate from the traded market before replacement smelting capacity exists. The near-term effect is to tighten feedstock further, push spot charges deeper into negative territory, and accelerate the exit of Japanese, Korean, and Spanish plants that operate without state support. The 2026 to 2032 window therefore favors Chinese processing share even as producers act to reduce it.
Outlook
Two variables will determine whether zero becomes the durable benchmark. The first is whether Beijing continues to ration capacity, since a resumption of smelter construction would confirm that the fee collapse is a policy choice. The second is whether producer-state smelters reach operation before the remaining independent capacity outside China closes.
A third signal is the 2027 negotiation, which begins in the fourth quarter of 2026, and the fixed annual reference is already under strain from both directions. Japanese smelters secured 2025 terms above the Chinese settlement and have sought charges set apart from the China-established benchmark for 2026, while Antofagasta has agreed to sell term concentrate to some Chinese smelters at spot-indexed prices with a guaranteed floor, a departure from the fixed-charge model that has organized concentrate pricing for decades. The 2027 round will show whether a single benchmark survives at all.
Neither of the first two variables favors a recovery in charges before 2028. Against this backdrop, the record copper price accrues to whoever owns the ore, and the processing stage continues to operate at scale only where a state is prepared to run it without a commercial return.
Over the past seven months, the relevant figure has risen by 5.3%
In July 2026, US steelworks shipped 8.22 million short tonnes of steel. This is 3.7% less than in June, according to a report by the American Iron and Steel Institute (AISI).
Compared with July 2025, the figure rose by 5.4%.
In January–July, steel shipments totalled 55.74 million short tonnes. This is 5.3% higher than in the same period last year.
Over the past seven months, shipments of corrosion-resistant sheets and strips rose by 13% year-on-year, those of hot-rolled sheet by 8% year-on-year, and those of cold-rolled sheet by 0.1%.
It should be noted that in July this year, the United States imported a total of 2.26 million short tonnes of steel. In particular, imports of rolled steel amounted to 1.56 million tonnes. Compared with June 2026, these figures rose by 7.4% and 6.3% respectively. In the first seven months of 2026, total steel imports fell by 19.6%, whilst imports of rolled steel fell by 22.1% compared with the same period in 2025.
As reported by GMK Center, the US reduced imports of rolled steel by 17.1% year-on-year last year, to 18.66 million short tonnes. Total steel imports (rolled products and semi-finished products) amounted to 25.24 million tonnes, down 12.6% year-on-year. The share of imported rolled steel on the US market is estimated to have stood at 18% in 2025.
https://gmk.center/en/news/steel-shipments-to-the-us-fell-by-3-7-m-m-in-july/
Soaring LNG prices due to the Strait of Hormuz blockage are prompting economies to shift to alternative energy sources, pushing coal demand to a another record high this year, the International Energy Agency (IEA) said in a new report on Thursday.
The surge in LNG prices have pushed markets including China, India, Japan, South Korea, and even Europe, to rely more on coal-fired capacity for electricity generation, the IEA said in its new Coal Mid-Year Update 2026.
The Middle East is not a major exporter of coal, so global coal shipments weren’t disrupted when the Iran war began more than six months ago. But the LNG shipments out of the Strait of Hormuz slumped materially, pushing LNG and gas prices higher and prompting utilities to run coal-fired units harder.
As a result of the major energy supply dislocation, global coal demand – which before the war was expected to slightly drop this year – is now projected to rise by 1.2% in 2026, the IEA said. This increase would bring global coal consumption to a record 8.94 billion tons this year.
The change in coal demand forecasts for this year “mainly reflects the crisis in the Middle East and an unusually strong El Niño weather pattern,” the IEA said.
“Although shipping disruptions in the Strait of Hormuz do not directly affect coal markets, tighter natural gas supply has pushed up prices, prompting some electricity systems to switch from gas to coal.”
Coal demand in the two biggest coal consumers, China and India, is expected to rise this year. Chinese demand is set for a 1% increase to 5 billion tons, while India will see a 4.2% rise to 1.353 billion tons, reversing last year’s temporary slight drop, according to the IEA.
If the Strait of Hormuz remains largely closed to LNG shipments well into next year, global coal demand could further rise to new record highs, the agency added.
