India will overtake China as the largest importer of coking coal by 2025, Fitch Solutions Macro Research said on Friday.
"We forecast India's coking coal consumption to grow at an annual average rate of 5.4 per cent between 2019 and 2028, driven by an equally robust expansion in steel production in the country," it said in a report.
"As a result, we expect India to overtake China as the largest importer of global coking coal by 2025, despite the country only importing half as much as China in 2017," it added.
While China will remain dominant in terms of overall market share, India will become increasingly important in terms of seaborne demand, it said.
High frequency indicators show that while the largest importer of Australian coking coal, India, saw a 25.8 per cent year-on-year (YoY) increase in coking coal imports from Australia in the second quarter of 2019, China, the second largest importer of Australian coking coal, decreased imports by 8.8 per cent YoY in the same period.
In global terms, as China will continue to account for roughly two-thirds of global coking coal production and consumption over the coming years, trends in the country's mining and steel sectors will continue to exert a dominant influence on seaborne prices.
"Although taking a longer time than previously expected to play out, due to the ongoing risks to the economy and government efforts to stimulate domestic industries, our view remains that steel production in China will stutter in the medium term with the slowing of the economy and construction sectors, dragging coking coal consumption lower," it added.
