According to the Minerals Council of Australia’s Commodity Insight Report, the demand for global seaborne thermal coal doubled in a span of 13 years and is expected to continue its growth trajectory. The volume of demand grew each year, except 2015, reaching 1000 Mt (million tonnes) in 2019, according to the report.
In 2006, the global demand for seaborne thermal coal was approximately 500 Mt. Of which, Asia singlehandedly accounted for about 300 Mt. Largest importers in Asia for thermal coal are Japan, Korea and Taiwan, making up 80%.
“Australian thermal coal is amongst the highest quality in the world, enabling more energy to be produced with less CO2 emitted per kWh of electricity produced than most alternative sources” said MCA chief executive officer Tania Constable
Recent forecasts by Commodity Insights predict that Asian thermal coal imports will grow substantially over the next decade. The growth is projected to be over 270 Mt to more than a billion tonnes per annum.
As countries in Asia develop, their demand for thermal coal is bound to surge. The developing regions of Asia – China, India, Thailand, Vietnam, Indonesia, the Philippines, Pakistan and Bangladesh – will require greater resources for their ever-increasing electricity demand, strong economic growth and a faster rate of industrialisation.
For the increase in demand to be beneficial for the Australian mining industry, long and short term government policies will remain critical. These decisions will drive fluctuations in the share of coal imports. The share of coal in electricity generation will also need to be watched carefully in the content of Paris Agreement Target.
Due to the ongoing COVID-19 pandemic, the growth is expected to be in the negative in 2020. However, the market expects strong recovery, with most countries set to increase imports.
MCA chief executive officer Tania Constable added, “This presents a challenge to work harder to reduce emissions in the region to meet Paris Agreement goals, including through the use of technology such as carbon capture, utilisation and storage (CCUS)”
Read more about Australian Imports and trade with China here.