China may face up to 56 mln T coking coal shortfall -paper

Tue Mar 29, 2011 12:41am GMT

SHANGHAI, March 29 (Reuters) - China, the world's biggest user and producer of coal, may face a shortfall of 56 million tonnes of coking coal this year, the China Securities Journal reported on Tuesday, pushing Chinese steel mills to look further afield to make up the supply gap.

China is expected to produce 513 million tonnes of coking coal, used in steel production, in 2011, but total consumption is expected to reach 569 million tonnes, the paper said, citing forecasts made by top Chinese coal miners and analysts at an industry conference.

Faced with a widening supply gap, Chinese mills are set to boost imports from countries such as Mongolia, Russia and Australia.

However, import growth for the year is expected to fall to around 10 percent, compared with the stellar 37.3 percent growth posted in 2010, said Shanxi Coking Coal Group Ltd General Manager Liu Shengrui.

China imported 47.27 million tonnes of coking coal in 2010, with imports from neighbouring Mongolia surging 278 percent to 15 million tonnes, trailing behind top supplier Australia's 17.4 million tonnes.

Global coking prices are forecast to rise strongly overly the first half of this decade, as producers struggle to keep pace with surging demand led by steel makers from China and India. (Reporting by Fayen Wong; Editing by Ken Wills, sourced Reuters)