How soon would the Chinese return to the thermal coal market
and will Indian imports continue to stay strong as in the recent months? These
are two big questions everyone in the global coal market is asking.
Although currently thermal coal stocks with China look
relatively high, there is no mistaking the fact that independent power
producers are already drawing on their existing inventory.
At the same time, available supply is relatively static. As
destocking will have to come to an end sooner rather than later, expectations
have arisen that China will enter the market soon.
“A strong pick up in Chinese demand does not look too far
away. In other words, one can expect increased buying activity from China in
the not too distant future,” remark experts.
As for India, imports have been strengthening in the last
two months. Import figures for January have come out stronger than expected. On
an annualised basis, import volume would be well in excess of 80 million
tonnes.
With the rupee gaining some strength of late, the currency
factor has turned somewhat favourable for imports.
Together with decent amount of pent-up demand in the system,
it is expected that imports will remain robust.
After concerns were raised about Indian demand, imports have
rebounded in the recent months. While still below peak levels seen in 2011,
January 2012 imports are over 80 per cent year-on-year higher than 2011.
So, a strong Indian demand coupled with imminent entry of
China in the market is seen as a sure recipe for change of global thermal coal
market sentiment, assert experts.
Source: The Business Line
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