By Kevin Grewal, editorial director at www.SmartStops.net
ChinaIn the coming year, China is expected to be a net importer of coal. This phenomenon in the Asian nation is two-fold. From a demand perspective, China continues to grow and therefore demands more coal, to generate electricity and fuel its power plants. From a supply perspective, China has been known to be the largest coal producer in the world. However, the nation is in the middle of a major consolidation of its coal industry, which is restricting supply. Additionally, unseasonably cold weather has increased the energy demand for home heating. Therefore, demand for coal in China will likely far outweigh supply.
IndiaAs India continues to grow, infrastructure is expected to play a pivotal role in both government spending as well as GDP growth. This growth emphasis in conjunction with the government's plans to add additional power-generating facilities is likely to spur demand for coal. Granted, India has a domestic supply of coal, but the quality of this coal is poor and results in major logistical problems. As a result, India is likely to be a huge importer of global seaborne thermal coal.
United StatesAs the United States emerges out of the recession and manufacturing starts to churn, steel mills have started firing up. In fact, steel utilization rates are up about 20% from their lows and are expected to continue to rise, further increasing demand for the charcoal commodity. Although supply and demand are not likely to be much of an issue in the U.S., the Asia-Pacific is likely to absorb much of the demand destruction in the U.S.
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