BEIJING The United States will play an expanding role in the seaborne metallurgical coal market as traditional supply sources face mounting challenges, Arch Coal Asia-Pacific Pte. Ltd. president Renato Paladino said.
Rising cost curves around the world make the United States increasingly competitive, with relatively low capital expenditures and stable operational expenditures, he told delegates at the 11th Coaltrans China Conference in Beijing.
Australian producers have faced challenges with labor costs, new taxes and an appreciating Australian dollar, which have put upward pressure on capital requirements and cash costs, Paladino said. And existing coal regions in China are maturing, with production increasingly moving toward the northwestern part of the country and deeper underground, which makes logistics chains longer and more expensive.
The United States exported 59 million tonnes of metallurgical coal in 2012, up from 21 million tonnes in 2006, Paladino said, and this long-term growth trend is expected to last into the next decade.
"While current market conditions are challenging, long-term prospects for coal demand are bright," he said, pointing to space for further growth in Asia. The Chinese government has set a goal of doubling the countrys gross domestic product by 2020, which would imply at least 220 million tonnes of additional steel consumption, he said, while world steel production is projected to increase to 2 billion tonnes in 2020 and global metallurgical coal imports to 518 million tonnes.
Arch Coal Asia-Pacific is a subsidiary of St. Louis-based Arch Coal. Inc.
A version of this article was first published by AMM sister publication Steel First.