Old King Coal will stay on the commodities throne for years

There are many dismissing coal as the unwanted black sheep of the fossil fuel family, blamed for 40pc of the world’s carbon dioxide emissions that contribute to global warming.

But in defiance of environmental concerns, there has been little sign that any fall off in coal demand this year is due to anything other than the recession.

Analysts from JP Morgan reckon that thermal coal, used in power stations, will rise from $70 to $85 per tonne next year, based on rebounding demand from China and India. While global inventories have been unusually high in the downturn, the bank believes stocks may decline from 40m tonnes this year to 22.7m in 2010.

“Supply will be tight in the next two years,” said Stevanus Juanda, a mining analyst. “In the second half of 2009, we have observed sizeable imports of coal by China, due to the closure of mines in the Shanxi region and rise in electricity generation.”

Experts are also predicting a shortage in coking coal used to make steel over the next year, driven up 12-fold by demand from China.

Telegraph