Coal demand projected to jump by 70%
Coal demand projected to jump by 70%
SYDNEY (Reuter): Demand for internationally traded steaming
coal is forecast to jump by 70 percent to 395 million tons
between 1995 and year 2005, a major study of the world coal trade
by Australian Mineral Economics Pty Ltd (AME) said.
Australia, the major beneficiary, will expand production and
shipments by more than any other producing nation, according to
the AME study, "Export Coal 1995/1996 -- the Second Boom."
Total internationally traded steaming coal is forecast to rise
to 337 million tons in year 2000 and to 395 million tons by 2005
from 231 million tons in 1995.
Australian coal shipments of all types are forecast to rise by
77 million tons to 212 million tons in 2005 from 135.5 million
tons in 1994.
"There will also be massive expansion from countries such as
Colombia, Venezuela and Indonesia," the report said.
However, the study raises questions about the financial
viability of new coal developments.
"The international coal trade has not been profitable for many
players for a long time. It is difficult to understand how the
required capacity will be developed," the AME study said.
AME bases its steaming coal demand forecasts primarily on
Southeast Asian power needs created by strong economic growth.
International coking coal demand is forecast to increase
slowly, by 17 million tons a year between 1994 and year 2000.
Total demand for traded coking coal is forecast to reach 178
million tons by year 2000 and 180 million tons by year 2005, up
from 162 million tons in 1994.
Forecast steel industry coal demand after year 2000 is "very
flat", increasing by two million tons a year for coking coal and
by one million tons a year for non-coking coal.
Increased blast furnace steel production is expected from
South Korea, India, Taiwan and possibly from greenfields plant in
Indonesia, but not from Japan, the report said.
Japan
Japanese demand for coking coal is forecast to contract to
54.3 million tons in 2005 from 58.56 million tons in 1994, while
imports of steelmaking non-coking coal are expected to rise to
10.44 million tons from 6.94 million tons in 1994.
The report points to big increases in imported coking coal by
South Korea, Taiwan and India.
South Korean imports are forecast to rise to 23.05 million
tons in 2005 from 13.81 million tons in 1994.
Over the same period, Taiwan's imports are forecast to rise to
14.05 million tons from 3.88 million tons and India's to 14.18
million tons from 8.91 million tons.
Japanese import demand for steaming coal is forecast to rise
to 95.7 million tons by 2005 from 52.6 million tons in 1994.
Over the same period, Taiwan's imports are forecast to rise to
34.6 million tons from 22.5 million tons; South Korea's to 54.3
million tons from 21.6 million tons; and Southeast Asia's to
37.1 million tons from 13.0 million tons.
The report said nominal prices of imported coking coal will
rise to US$73.16 a ton in year 2005 from $51.10 in 1995, after
reaching $53.90 in 1996.
Nominal steaming coal prices will rise to $60.50 a ton in 2005
from $40.85 in 1995, after reaching $43.07 in 1996.
AME said the 1996 coal pricing negotiations between Australia
and Japan would be undertaken in an atmosphere of mutual
mistrust.
"Following the higher than expected price rise in early 1995,
the Japanese have been seeking any way possible to diminish their
reliance on Australia for supply," AME said.
"Despite their desire for no price rise, the Japanese steel
mills will accept one to support the benchmark system and their
role as price setter," AME said.
It forecast a 1996 coking coal price rise of about US$2.50.