China's imports drive up coking coal prices: CRISIL
18 May 2010
International coking coal prices will rise sharply over the next two years, as China steps up its imports to meet a growing shortage.
CRISIL Research saide in a commentary that it expects coking coal prices to increase by more than 50 per cent from the 2009 average of $150 per tonne, to $230-240 per tonne in 2010, and further to $270-280 per tonne in 2011.
China, which accounts for almost half the consumption of the world's coking coal, used in the manufacture of steel, will face an increasing shortage over the next two years. Since early 2009, the Chinese government has been closing illegal coal mines for safety reasons.
This has affected coking coal production in China, with production dropping marginally to around 380 million tonnes in 2009 from 387 million tonnes in 2008.
As a result, from a position of self-sufficiency in 2008, China imported 30 million tonnes in 2009. China's requirement of coking coal will increase by around 8 per cent annually, double the likely production increase of 4 per cent annually.
CRISIL Research therefore expects China's imports to grow rapidly, to about 50 million tonnes in 2010, and further to 70 million tonnes in 2011.