India's thirst for coking coal is only just beginning. Photo: Rob Homer
INDIA may triple coking coal imports within five years to meet surging demand from steelmakers, according to the latest research from ANZ.
Purchases may rise to 90 million tonnes in 2015 from 30 million tonnes last year, Mark Pervan, the head of commodity research at the bank, said in Shanghai yesterday.
Steel production in India may increase to about 10 per cent a year in the next five to 10 years, driving demand for coking coal, Mr Pervan said. India's steel output is about one-tenth of that of China, the world's biggest producer.
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India ''will be the largest export destination for coking coal'', he said. ''This is why Indian steelmakers are aggressively trying to grab coking coal supply in Australia.''
Average prices of premium coking coal may increase 18 per cent to $US225 a tonne in 2015 from $US191 last year, Mr Pervan said. They could hit $US279 this year.
China's coking coal imports may be between 60 million and 70 million tonnes in 2015, Wu Wenzhang, the president of industry researcher Steelhome, said.
Kobe Steel, Japan's fourth-largest steelmaker, agreed to pay Rio Tinto Group a record price of $US330 a tonne for coking coal in this quarter after supply from Australia was disrupted by heavy rain and floods.
The record prices will curb China's import demand, which fell 3.6 per cent to 10.49 million tonnes in the first quarter from a year ago.
The price of iron ore, also used in steelmaking, may rise 11 per cent to average $US127 a tonne in 2015 from $US114 last year, Mr Pervan said.
Bloomberg