Miner BHP Billiton expects India to lead future demand growth for coking coal, as Chinese imports steady while global competition from suppliers in Australia, Russia and North America intensifies.
The world's biggest seaborne coking coal miner expects overall demand for coal to grow, said Dean Dalla Valle, president of BHP Billiton Coal, in remarks prepared for a Committee for Economic Development of Australia event Wednesday.
China's newly cemented position as a major net importer of coking coal may be assured, based on the miner's expectations.
"China is the largest producer of metallurgical coal but it's still expected to remain a significant importer," he told the event in Brisbane. "However, most future demand growth is likely to come from outside China, with the likes of India, a country not overly endowed with metallurgical coal, anticipated to be the most significant source of new demand."
The latest remarks compare with the miner's expectations a year earlier that growth in met coal demand would be driven mainly by China and India.
Chinese imports of coking coal so far this year have slowed, as destocking across the steel chain by Chinese mills facing a credit squeeze is noted.
China's coking coal imports in the first two months of the year totaled 7.9 million mt, down a quarter from a year earlier. India in February imported 2.1 million mt of coking coal, down 4.5% year-on-year, through 21 major ports, based on Interocean shipping data.
BHP Billiton said metallurgical coal prices have fallen since 2009 from more than $300/mt to around $105/mt.
There was a need to improve productivity to produce the kind of returns to keep existing mines running and develop any new mines, he said.
BHP Billiton, which operates coking coal mines through joint ventures with Mitsubishi Corp. and Mitsui & Co., along with local competitors has seen costs benefit from the weaker local currency.
The miner stresses its coal business faces "stiff global competition." Outside the pricing pressures from competitive supplies of metallurgical coal from global origins, a rise in Indonesian supply affecting thermal coal prices was noted.
