In its seminar “Feeding the dragon” on China’s steel industry and its potential impact on raw materials, 2006 and beyond, CSB remained positive on the future of coking coal into China.

“Despite the collapse in Asia’s spot iron ore market, declines in steel prices, and global steel production cuts, we maintain a positive short- to medium-term outlook for China’s economy, its domestic steel demand and its demand for raw materials,” CSB said.

It forecasted in 2005 China’s 800-mill steel industry would import 15 million tons of coking coal, and predicted 2006 imports would double 2004 levels.

“China’s share of the global coking/metallurgical coal market is relatively small, but its coking coal demand is being increasingly met by imports. China’s new net importer status reflects sharp growth in steel output: local supplies cannot fully meet demand,” it said.

After a $US70/t increase in hard coking for 2005, CSB predicted another $10/t lift for 2006, then rollover for 2007.