(EnergyAsia, March 10 2015, Tuesday) — India will emerge as the most important market for metallurgical coal from 2015 as its demand rises to surge ahead of Japan 10 years from now and China by 2035, said UK consulting firm Wood Mackenzie.


For the rest of the decade, the company expects China to remain the world’s leading coal importer with purchases exceeding 100 million tonnes by 2020.

But Chinese coal appetite will peak at 880 million tonnes as it reaches the limit of hot metal demand by then.

India will offer a sharp contrast, with coal and hot metal demand growth accelerating after 2020 as its near-term consumption will be constrained by government bureaucratic red tape, regulations and permitting issues. Wood Mackenzie expects India’s steel demand to grow by four to five percent per year through 2020, and by up to seven percent per year in the following 15 years.

“This will skew most of the 51-million tonne coal import growth in India towards the 2020-2035 timeframe,” said Ronnie Cecil, the firm’s principal steel analyst,

Suppliers will be relieved to hear that India will raise imports by two million tonnes this year to partly offset a projected drop of four to five million tonnes in China.

Speaking at Coaltrans India last week, Mr Cecil said India will need the extra coal to boost steel production by around four percent this year.

He expects India’s imports of semi-soft coking coal and pulverised coal to rise sharply at the same time that China will reduce imports on account of its slowing steel sector, lower coke prices and continued uncertainty over the enforcement of trace element standards on met coal.

Wood Mackenzie expects India to account for 40% of the projected 123 million tonnes increase in global met coal trade over the next 20 years, with China in second place at 28%. India will surpass Japan as the world’s largest coal consumer in 2025 and draw level with China 10 years later.

“In 2015, the combined net increase in global seaborne demand will just about be sufficient to offset the negative China impact this year. India offers the main ray of hope with steel production growth on course to advance 4% this year boosting demand for imported met coal,” said Mr Cecil.

“The scarcity of good quality premium hard coking coal locally will continue to support imports.”

 

This entry was posted in and tagged . Bookmark the .