Queensland faces lower coking coal demand from China

Friday, 02 October 2020 17:37:14 (GMT+3)   |   Istanbul
       

Ongoing changes in demand and technological developments in terms of steel production in China and India are critical to the long-term demand for Queensland coking coal, according to the analysis of Queensland Treasury in Australia.    

According to the analysis, future demand for metallurgical coal hinges primarily on developments in China and India, in particular the outlook for steel production in those economies.

China aims to upgrade its existing steelmaking industry through a range of efficiency measures which may limit the country’s metallurgical coal demand. China’s domestic supply of steel scrap is expected to increase significantly to 300 million mt by 2030. Technological developments will allow steelmaking without metallurgical coal. Looking beyond 2020, the potential for China to increasingly recycle steel scrap may lower the demand for blast furnace iron, and therefore iron ore and metallurgical coal imports in the medium term.

As India’s steelmaking capacity expands, it has increasingly become a growth market for Queensland’s metallurgical coal exports. The scale of India’s expansion is expected to be large enough to offset any potential reduction in demand for metallurgical coal from China.

With limited metallurgical coal mining developments in Queensland after the global financial crisis, Queensland’s coal industry may only be able to slightly expand its metallurgical coal production in the short to medium term.


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