The Coal Market – The Chinese Change the Rules
Until 2003, China was among the largest coal exporters. Since then, China has undergone massive change, which transformed it into a swiftly growing industrial power. The country’s urbanization process caused it to consume much more electricity, and it began consuming more coal than it could produce. The result of this process was China’s turning from a coal exporter to a giant importer, which generated a sharp and continuous increase in global coal prices.
Since 2014, there has been a decline in the Chinese economic growth. The decline caused a decrease in the coal demand and import, and contributed to the decline in global coal prices.
However, additional countries in Asia, such as India, South Korea, Taiwan, Malaysia and others, are undergoing a growth process that increases demands for energy.
From China to India
Today, the coal market monitors India’s growth rate. It is widely expected that due to similar growth processes, India will also become an industrial power consuming an increasing amount of electricity and as a result, more coal.
However, the impact on international coal pricing is unclear. India has substantially increased coal import over the last few years, becoming the largest importer in the world, but seemed to have reached the peak in import volume. The rate of import increase is not expected to rise substantially, as India is determined to significantly expand local coal manufacturing at the expense of import.
Coal can heat up independently and ignite.