Australian coal mining giant BHP believes that the long term demand growth of the emerging economy in India supported by the rising output could help offset the flattening demand from China feared in the 2020s. Australian exporters of metallurgical coal which are to used to make steel are increasingly looking to the rapid growth of India’s steel sector to help to fill the looming demand gap and cushion the blow.
“BHP’s modeling had found China is now in a plateau phase, while demand in other top steel markets Japan and South Korea were also subdued. The mature markets are sort of settling a little bit and India is coming up, filling a gap that would have emerged”, said Huw McKay, BHP vice-president of market analysis.
China’s immense appetite for two commodities ie iron ore and coal helped deliver a windfall to the leading miners in 2019 as well as a timely boost to the Morrison government’s federal budget. But the latest industry and government modeling projects Chinese demand to ease owing to lower margins, a weakening in global growth and the continuing US-China trade war.
Source: SYDNEY MORNING HERALD
