Australia seeks to expand coal export to China

According to predictions of market insiders, Australia will hopefully increase its coal export to China. As per report, although China’s export oriented economy is losing momentum for growth market insiders predict that Australia’s coal export to China will still increase which is undoubtedly good news to miners in Australia.

According to the prediction of Abare, China’s power coal import in 2009 will increase by 11% YoY to reach 40 million tonnes and that of 2008 will slide by 13% YoY. Its coking coal import of next year will go up to 7 million tonnes from 6 million tonnes.
Abare expressed that in late October 2008, the cost for China to import coal from Australia is about USD 13.5 lower than domestic coal price.

As China strives to come over the bottle neck in coal exploiting and Vietnam limits its coal export China is faced with increasingly fewer choices. Although in the past two years, the volume of China’s newly added installed capacity is equal to the existing volume of that of Britain and France, Australia’s coal export to China has dropped by one third each year.

Given China’s poor infrastructure and busy traffic importing coal is more appealing to some markets. In China, coal is mainly produced in north area such as Shanxi province then it is transported to ports close to seas and finally it is delivered to the south. Besides, as the world economy slows down international freight has declined sharply, thus China’s power plants and steelmakers are more inclined to import coal from abroad.

Steel Guru