India’s Increasing Coal Output to Stabilize Global Prices: Analysis
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New Delhi, Dec 5 (NationPress) India’s expanding domestic production of thermal coal and the deceleration of the Chinese economy are anticipated to place downward pressure on fossil fuel prices in Asian markets during 2025, according to a report from S&P Global released on Thursday.
The report indicates that India’s increasing domestic supply along with the government’s focus on reducing import dependency is likely to restrict industrial purchases to the local market.
Vignesh Sundaram, a principal research analyst with Commodity Insights, predicts that total imports could reach approximately 206 million MT in 2025 due to heightened capital investments in infrastructure. Nevertheless, robust domestic production is expected to maintain overall import levels, he remarked.
The report also anticipates that the slowdown in the Chinese economy will diminish the demand for coal in the global market.
As per the latest data from S&P Global Commodities at Sea, China imported around 353 million metric tonnes (MT) of thermal coal so far in 2024.
Pat See Khoo, a senior analyst at S&P Global Commodity Insights, stated that the nation is likely to import approximately 380 million MT of thermal coal in 2025, which is slightly lower than the imports in 2024, owing to a stable domestic supply and moderate growth in coal-based power generation.
An S&P Global Ratings report suggests that the US is expected to raise export tariffs on Chinese goods in South Asia.
"We anticipate the U.S. will increase the effective tariff on Chinese imports to 25 percent from around 14 percent currently, starting in the middle of 2025," the report states. It also projects Chinese GDP growth at 4.1 percent in 2025, which is 0.2 percentage points lower than the September baseline.
Meanwhile, Indonesia is predicted to continue being a key player in the Asian thermal coal market in 2025, maintaining its position as the world’s largest exporter. However, mid to small-sized miners might face difficulties due to suppressed global coal prices amid China's tough negotiating stance.
Australia’s position in the Asian thermal coal market is projected to remain robust in 2025, bolstered by mid-calorific value (CV) coal demand from China. A structural supply shortfall in seaborne high-CV thermal coal due to underinvestment and depletion of existing reserves could lead to rising prices, as per the latest market outlook for Whitehaven coal.
Russia’s coal exports to Asia are expected to encounter considerable challenges in 2025 due to infrastructure constraints and declining production in its primary coal-producing region, Kuzbass. Despite these challenges, Russia continues to be a crucial supplier of mid- to high-CV coal, particularly to China and South Korea, the report further added.
