Monday, December 21, 2009
INCREASED Chinese thermal coal imports and South African port constraints should boost Australian coal prices and demand in the new year, potentially lengthening queues at Newcastle.
According to Chinese media, the nation is preparing for a seasonal jump in heating demand by dropping coal import tariffs and giving thermal coal, used to make electricity, priority over iron ore and coking coal on the railways.
At the same time, bugs in a new computer system and persistent rail problems mean South Africa's Richards Bay coal terminal cannot meet export demand, with miners unable to get growing stockpiles to port, according to Reuters.
Along with increased heating, China's winter coal demand has also been boosted by cold weather closing down some of the nation's hydro-electric power.
This year, winter import demand will be particularly strong as it combines with growing underlying thermal coal demand and domestic supply constraints.
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