Wednesday , April 8 2020
Breaking News
Home / International Customs / India / Indian coal demand growth overtakes China with import of further 2 million tonnes
Indian coal demand growth overtakes China with import of further 2 million tonnes

Indian coal demand growth overtakes China with import of further 2 million tonnes

NEW DELHI: India will drive growth in the global seaborne metallurgical (met) coal during 2015, importing a further 2 million tonnes (Mt).

This comes at a time when we expect a retreat of around 4-5 Mt in Chinese imports, due to its slowing steel sector, lower coke prices and continued uncertainty regarding trace element standards being enforced on met coal.

India’s increased contribution to global seaborne demand is being bolstered by its steel production growth which is on course to increase by 4% this year. Semi-soft coking coal and pulverised coal injection coal will see imports rise sharply thanks to the ongoing focus on hot metal cost reduction.

The country will remain a key driver of global met coal trade growth over both the medium and long-term. We predict a 123 Mt rise in in global trade in the period to 2035, with India expected to account for 40% of this figure and China contributing 28%.

Indian demand will reaching parity with China by 2035. However, while there is potential for huge steel consumption growth within India, the ability to satisfy that demand is constrained by bureaucratic procedures, regulations and permitting issues.

As a result, we anticipate relatively modest steel growth of 4-5% per annum from now until 2020 before ramping up to 6-7% per annum in the period to 2035.

Overall, although India’s steel sector is not yet a dominant force, it is clearly starting to show strength in supporting demand in a very week and oversupplied global market. It is certainly one to watch to understand the shift in demand growth concentration when China eventually reaches peak iron and steel demand.