In 2010, global trade of metallurgical coal is forecast to increase by 10 percent to 234 million mt, which is one percent lower than trade in 2008, according to a report released by the Australian Bureau of Agricultural and Resource Economics (ABARE). Increases in demand from traditionally important consumer markets are to be slightly offset by increased domestic production in China.
According to the report, in 2011 world trade of metallurgical coal is forecast to increase by seven percent to 251 million mt. This is supported by increases in most importing countries, owing to economic recovery in developed economies and an increasing reliance on imports in China. The rate at which imports to traditionally important metallurgical coal markets increase depends largely on the pace of economic recovery in those economies. While importers such as Japan, the European Union and South Korea still account for the majority of metallurgical imports, China and India are expected to remain the fastest growing importers.
In 2010, metallurgical coal imports by Japan and the EU are expected to grow by double digit figures, while China's imports of metallurgical coal are forecast to increase by nine percent, which is a much slower growth rate relative to 2009. Increases in demand from Chinese steel mills are expected to be partially offset by higher domestic production.
However, as imports largely account for the marginal supply to China's steel industry, unexpected declines in steel production have the potential to significantly affect Chinese imports of metallurgical coal.
In 2010, Australia is forecast to remain the world's largest exporter of metallurgical coal, increasing its share of the global seaborne market from 64 percent in 2009 to 65 percent in 2010. Exports from Canada and the United States are forecast to increase in 2010, reflecting recovering global demand and modest capacity growth. In 2011, all major export markets are forecast to experience modest growth, as demand for seaborne metallurgical coal continues to grow.
Russian metallurgical coal exports in 2010 are forecast to decline by eight percent to 12 million mt, due to the accident which occurred at the country's largest coking coal mine Raspadskaya in early May. In 2011, the Russian Federation's exports of metallurgical coal are forecast to increase by 17 percent to 14 million mt, under the assumption that the Raspadskaya mine operates at full capacity.
Given supply restrictions in Russia and continuing strong demand particularly from Asian steel mills, exports of metallurgical coal from Canada are forecast to experience strong growth in 2010 and 2011.