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Tuesday, 20 January 15
INDIA TO SURPASS THE UNITED STATES AND BECOME THE SECOND-LARGEST COAL CONSUMER IN THE WORLD BY 2019 - IMF

COALspot.com: In 2013, coal added more primary energy than any other fuel and was the fastest-growing fossil fuel, enhancing its position as the second-largest primary energy source and closing the gap with oil, IMF said in its latest Medium-Term Coal Market Report.

According to IMF, in 2014, coal oversupply persisted and very low coal prices continued to dominate, as they have since 2011. The domestic oversupply in China – accompanied by price reduction from the major producers to protect their market share – has strongly impacted international markets, which were likewise oversupplied by expansions by all major exporters. Imported European steam coal prices, one of the main reference prices worldwide, were in the $70-80/ton range during 2014, compared to over $120/ton in March 2011.

Commented on Australian met coal, IMF noted that, Australian met coal was in a very narrow band between $112/ton and $116/ton since April 2014, compared to March 2011 when it averaged over $320/ton. With persistent low prices, the strategy of producers is to reduce costs. In the medium term, despite low prices, expansions will happen. There are many projects in different phases of development ready to start or ramp up production, although most of them will not do so at current prices. 

In Medium-Term Coal Market Report, IMF further noted that, global coal demand grows on average +2.1% per year over the outlook period, from 5690 million tons of coal- equivalent (Mtce) in 2013, to 6462 Mtce by 2019.

Coal demand in non-OECD countries (members of Organisation for Economic Co-operation and Development) will grow on average +3.0% per year from 4239 Mtce in 2013 to 5060 Mtce in 2019. Most incremental demand volumes are projected for China (+471 Mtce) and India (+177 Mtce), enabling India to surpass the United States and become the second-largest coal consumer in the world by 2019, IMF concluded.



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