He said growth in key Asian markets for high-quality Australian coal would continue to underpin the nation’s coal exports with increasing demand forecast over the medium term.
The International Energy Agency’s Coal 2017 Report – which predicts demand to 2022 – says higher consumption in India, South East Asia and other Asian countries – excluding China – is expected to more than offset lower demand in North America and Europe and flat demand from China.
“Export growth is attributed to Australia being an efficient coal producer that is well-positioned to deliver to growing Asian markets,” Evans said.
“Australia’s high-quality coal is also in demand because of its suitability for new generation High Efficiency, Low Emissions coal-fired power plants and steel making facilities located in Asia.”
Australia is forecast to export 198 million tonnes coal equivalent of metallurgical coal in 2022, dominating the market with a trading share of 72%. Thermal coal exports are projected to increase by an average of 1% annually, to 187Mtce by 2022.
Out to 2040, the IEA has forecast Australia’s share of the international coal trade is expected to increase from 34% in 2016 to 42%.
“Australia’s coal export markets of Japan, Korea and Taiwan remain stable, with thermal coal demand driven by existing and planned new modern coal-fired generation capacity,” Evans said.
“The biggest absolute demand growth comes from India, where demand is expected to increase by 135Mtce over the next four years because of growth in coal-fired generation in parallel with expected growth in renewable energy.
“With imports from Indonesia expected to decrease, the Indian market still represents a growing opportunity for high-quality Australian coal.”
ASEAN and other developing countries – Indonesia, Pakistan, Vietnam, Malaysia and the Philippines – are projected to have the strongest relative demand growth at 5.9% a year, again driven by increased coal-fired generation.
These growing markets are already significant for Australian coal exporters, with trade to the South-East Asian markets of Vietnam, Malaysia, Thailand and the Philippines valued at $1.7 billion in 2016-17.
