* China coal demand 'in structural and slow decline'-IEA
* Global coal demand to grow at 0.6 pct/yr to 2021
* Benchmark coal futures rise
(Adds coal price movement; adds bullet points)
By Nina Chestney
LONDON, Dec 12 Growth in global coal demand will
slow over the next five years due to lower consumption in China
and the United States and as renewable energy sources gain
ground, the International Energy Agency (IEA) said on Monday.
The IEA said last year that the world's top coal consumer,
China, could be facing peak coal demand for the first time due
to measures to cap coal use to tackle air pollution and curb
"In China, coal demand is in structural and slow decline
driven by a new economic growth model and diversification of
coal," the Paris-based IEA said in its medium-term coal market
Even though China's consumption is likely to have peaked,
the country will still be the largest coal user over the next
Its coal demand should decrease slightly to 2.816 billion
tonnes of coal equivalent by 2021, compared to 2.896 billion
tonnes of coal equivalent in 2014.
Globally, the IEA expects coal demand to total 5.636 billion
tonnes by 2021, compared to 5.400 billion tonnes last year, when
coal demand dropped for the first time this century.
This equates to 0.6 percent average annual growth from 2015
to 2021, below the 2.5 percent average yearly growth over the
"Because of the implications for air quality and carbon
emissions, coal has come under fire in recent years, but it is
too early to say that this is the end for coal," said Keisuke
Sadamori, director of the IEA's energy markets and security
"Coal demand is moving to Asia, where emerging economies
with growing populations are seeking affordable and secure
energy sources to power their economies."
The biggest growth in coal demand will occur in India, which
will have an annual average growth rate of 5 percent by 2021.
After years of decline, coal prices have rebounded sharply
in 2016, driven by a sharp cut in Chinese coal output coupled
with strong demand across the Asia-Pacific region and in Europe.
Benchmark API2 2017 coal futures rose by 4
percent to $65.75 a tonne on Monday morning, the highest level
since Dec. 2.
In its report, the IEA forecasts thermal coal prices to
decline next year and then remain relatively flat to 2021.
"Reasonable doubts persist on the sustainability of current
prices, given that climate pressure continues and air pollution
is a serious issue which will shape policies in China, India and
other emerging countries," it said.
Coal demand in the United States and Europe will continue to
decline, falling to 475 million tonnes and 337 million tonnes
respectively in 2021.
U.S. president-elect Donald Trump has said he wants to boost
the U.S. coal, oil and shale industries. However, there is
scepticism that coal will see a prolonged revival once Trump
takes office because demand from the power sector has been
declining since the emergence of shale gas in 2005.
(Editing by Dale Hudson and Louise Heavens)