boom to Asia … 280110
McCloskey bullish on coal as Asian demand remains strong
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By: Jade Davenport
27th January 2010
CAPE TOWN (miningweekly.com) – Coal prices were expected to be robust this year with the contract price of coking coal being sustained at $200/t and steam coal sustained at $100/t, McCloskey Group chairperson Gerard McCloskey said on Wednesday.
He told delegates at a conference in Cape Town that coking coal contract prices would move up from the current $129/t towards $200/t and would be sustained at this level for the majority of the year.
The price of Newcastle steam coal would consolidate at above $100/t.
The robust price levels would be sustained by continued strong demand from Asia.
McCloskey said that Asian demand for coal would remain strong and would increase by 60-million tons this year. That was double the growth of 30-million tons experienced last year.
Asian coal consumption was expected to increase to 460-million tons in 2010, which was up from 397-million tons in 2009.
China was expected to primarily fuel Asia’s demand for coking and steam coal.
McCloskey said that 2010 would see a further boom in exports to China.
The Asian giant was expected to boost steam coal imports by 40-million tons to 100-million tons and coking coal imports by 35-million tons to 70-million tons.
McCloskey added that China’s own coal production was expected to breach three-billion tons this year.
Beyond 2020, it was believed that China would consume between five-billion and seven-billion tons in the 2020s.
He said that the failure of the Copenhagen climate change negotiations was likely to ease China’s environmental passage and that the production and consumption of coal were likely to rise.
Demand for coal outstripped supply in countries like India and China, which were largely reliant on coal to feed their power industries.
McCloskey noted that Asian countries would turn to producers in South Africa, Indonesia, Colombia and Australia to meet their coal demand.
In fact, it was believed that 75% of South African export coal would be shipped to Asia this year, which was a 25% increase over 2009 export figures.
“This year the feeling is that 75% of South African coal may be going to Asia … I don’t know where the coal is going to come from to satisfy the market,” he said.