Heds up to an interesting piece from Australian National University researchers that contrasts with complacent Australian government forecasts:
- Our model suggests that if China sticks to its current climate pledges, thermal coal imports will drop by a quarter within three years from 210 megatonnes (Mt) in 2019 to 155Mt by 2025. That means Australian exports could fall by 20% by 2025, while Australian coking coal exports could fall even more. This is in stark contrast to predictions of stable demand or even continued growth by the Australian government.
- How could this happen so quickly, when coal prices have roughly tripled compared to the last decade? In short, better infrastructure. China has invested in major rail projects, including a direct rail line to a major coking coal mine in Mongolia, as well as increasing use in scrap steel.
Link here for more, will be interest to AUD traders.