Demand for seaborne thermal coal is expected to exceed supply by about 400 million mt by 2030, with new coal-fired electricity capacities coming onstream, according to Noble Group.
The trading company has estimated that the largest growth in demand would be from additional planned power generation capacities in Southeast Asia, which would reach about 249 million mt by 2030.
"By 2030 Southeast Asia imports will be 50% more than the Atlantic coal market," said Rodrigo Echeverri, head of Energy Coal Analysis, Noble Group, at the Coaltrans Conference, which is currently being held in New Delhi.
Demand from African countries, excluding South Africa, would be close to 40 million, Echeverri said, adding that 80% of South Africa's coal exports would be to other African countries and the Middle East.
"Supply will not increase until price corrects," said Echeverri, adding that the backwardated market structure prevents capital from being used to producing coal.
"Unless prices remain strong, Indonesia and Australia will not be able to ramp up production when the market needs it 2020 onwards."
While greenfield projects, mainly in Australia and South Africa, will be required in just five years, coal from Colombia and the US might also be needed to fulfill base requirements in Asia.
Echeverri said that he expects Indian import of coal to slide lower year on year until about 2021 and increase thereafter, exceeding 250 million mt by 2030. "The biggest risk to Indian imports of thermal coal is the production from captive coal blocks," he said.
India's electricity production, which has grown at a 5.3% compound annual growth rate in 2015, is expected to fall from 5.6% in 2017 to 4.2% by 2030, Noble Group said in its presentation at the conference.
While the share of gas in the fuel-mix for electricity generation is currently growing at 7.2%, for which the base is actually very small, the share of coal in the fuel-mix is expected to fall from 80% currently to 70% by 2030.
Over this period, the demand for coal in electricity generation is expected to grow at 4.8% CAGR.
"India has a lot of untapped demand [for electricity]," said a source with a power producer, adding that coal still is the cheapest source for producing power.
