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Tuesday, 01 December 09
INDONESIA COAL OUTPUT SEEN LIFTED BY CHINA, INDIA


Reuters reported that, Indonesia's coal output is expected to grow by as much as 12 percent in 2010, boosted by demand from power hungry China and India as well as from the domestic market, the chairman of the Indonesian Coal Producers Association said on Monday.

Indonesia, the world's biggest exporter of thermal coal, expects to produce 270-280 million tonnes in 2010, up from 250-260 million tonnes this year, Bob Kamandanu told Reuters in an interview.

"We still see good demand from China aside from continuing demand from India. We expect China's demand is not just temporary," Kamandanu said.

China is set to become a net coal importer for the first time this year, as imports soar after a government clampdown on small miners, while robust economic growth is also leading to higher demand for power generation.

Thermal coal imports into China from January to October have jumped 172.43 percent from a year ago, while coking coal imports have surged 401.58 percent.

Indonesian producers may have secured around 10 million tonnes of new coal supply contract with Chinese buyers for 2010, said Kamandanu.

Earlier trade sources said Indnesia's top five coal producers, including Bumi Resources Tbk, PT Adaro Energy and PT Kideco, said the total volume of thermal coal due to be sold to China for 2010 delivery had reached at least 15 million tonnes.

But Kamandanu warned there was still uncertainty over China's policy that could affect the long-term security for producers relying too heavily on supplying the country.

"If suddenly the Chinese government decides to stop coal imports, its coal demand could fall," Kamandanu said.

"China is a good market for growing but for sustainability we still need other portfolios," he said.

Kamandanu said a healthy appetite for imported coal from China and India should help boost Indonesia's coal exports to 220-225 million tonnes in 2010, up from an estimated 215 million tonnes in 2009.

Strong demand from China and India would help support global coal prices at around $80 a tonne for 2010, Kamandanu said.

Australian thermal coal prices, a benchmark for Asia, stood at about $81 a tonne on Friday, having jumped about 40 percent from a near two-year low of around $58 in March.
Source: Reuters



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