BackAsia thermal coal demand seen growing 8.7%
Asia thermal coal demand seen growing 8.7%
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By Reuters
Sydney: Asian demand for thermal coal will grow more quickly than expected this year and next, underpinned largely by red-hot consumption in China and India, an Australian government forecast showed on 24 September.
In an updated quarterly forecast, the Australian Bureau for Agriculture and Resource Economics (ABARE) said demand for imported coal in Asia would rise as much as 8.7 %, or 28.9 million tonnes this year, up from its previous forecast in June for a 17.2 million tonnes increase.
“Asia is forecast to remain the fastest-growing thermal coal import region," ABARE, the economic research body for the world’s number two thermal coal exporter, said in a report.
The bureau said that Asian demand in 2008 would grow by another 20.1 million tonnes or 5.6%, up from the previous 16.4 million tonnes or 3.1% forecast.
Growing demand from China, which is building coal-fired power plants at a rate of one a week, has seen a dramatic fall in its net exports since last year and helped coal prices to rally this year.
ABARE said China was expected to turn net importer this year and revised up its estimated Chinese import growth for 2007 by 37% to 46 million tonnes. Imports in 2008 were forecast to grow a further 7% to 49 million tonnes.
At the same time exports from China, the world’s largest coal producer and consumer, were forecast to fall by 24% to 45 million tonnes this year and to drop a further 11% to 40 million tonnes in 2008, as high domestic prices encourage coal producers to target the local market.
New Plants, Nuclear Outages
The agency noted that imports from India, the world’s third-largest coal producer, was expected grow 12.5% to 27 million tonnes in 2007, before jumping to 31 million tonnes next year as new power generators come online.
Demand from other Asian economies, including South Korea, Taiwan and Malaysia, are also forecast to increase in line with robust economic growth.
In Korea, where a total of 10 coal-fired power stations of 500 megawatts each, are expected to come online in 2007 or 2008, coal imports are seen to rise 6 percent this year to 63 million tonnes and by a further 7% to 67 million tonnes in 2008.
Japan, the world’s biggest importer of the power-plant fuel, is expected to see moderate imports growth of about 1.7% for the next two years, after nuclear generation rates fell off this year amid safety worries.
In terms of supply, ABARE downgraded its export growth forecast from Australia, the world’s second-largest thermal coal supplier, to a rise of just 0.8 million tonnes from 3.9 million tonnes previously. But exports are expected to rise 9.4 million tonnes in 2008.
Supplies from top thermal coal exporter Indonesia were also forecast to slow. After years of double-digit growth, ABARE said Indonesian supplies were forecast to increase just 9% this year to 186 million tonnes, and 8% to 201 million tonnes next year as more coal is kept for domestic use.
Separately, ABARE said global demand for metallurgical coal was expected to remain robust, thanks to expanding steel industries in China and India, as well as rising demand from established producers such as Japan.
“A rise in metallurgical coal contract prices is expected during the 2008-09 negotiations because of strong global coal demand and supply difficulties resulting from congestion in Australia coal supply status," ABARE said.
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