Chinese demand still strong for Australian coal
Australian mining companies can still be confident about the future of coal exports to China after a recent article revealed coal exports to China were expected to grow over the coming years.
The Age newspaper reported that the Chinese appetite for Australian coal will steadily grow over the coming years. A new report predicted that while the speed of growth will be slower, Chinese demand for high-quality Australian coal will increase.
This is partly due to the sliding Aussie dollar over the next five years. In terms of Chinese coal demand, that’s going to be somewhere around the 9 billion-tonne level by 2019.
The 9 billion tonnes of imported coal accounts for three-fifths of global demand growth in the coming years, as the world’s second largest economy shifts towards an economy driven more by domestic consumption rather than development of housing, roads and cities.
Indonesian coal mining slowdown a big plus for Australian mining companies
Another plus for Australian mining companies who have invested heavily in their coal asset development is the news that Indonesia is slowing its coal production output.
With this in mind, Australia is set to account for the largest growth in coal exports according to the International Energy Agency’s annual Medium-Term Coal Market Report.
The world’s biggest producer of seaborne thermal coal, Glencore, has†produced a statement highlighting the fact that sliding commodity prices and higher costs has meant that about 36 per cent of Australian coal mines†were unprofitable.
Whilst it’s common knowledge to those of us who work in the mining sector in Australia that coal prices have declined since 2013, the Medium-Term Coal Market Report highlights several factors which could assist coal mining companies in Australia be a little more immune from further economic pain.
India to be a huge consumer of Australian coal
India will also be at the forefront of domestic coal import growth, as well as other countries in Asia. This factor alone will go some ways to offsetting weaker growth in Europe and the United States – which is trying to become more self sufficient as it tries to master the art of shale gas extraction.