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The days of rapid growth in China’s coal demand that poured billions of dollars into the Queensland coal sector appear to be over and India is the new frontier, according to a report from Queensland Treasury.

The report said China’s demand for thermal coal, used in electricity generation, was waning and its plans to upgrade its steelmaking industry to be more efficient as well as increase the use of scrap steel meant metallurgical coal demand would also see little growth.

And if global demand for coal was close to projections made by the International Panel on Climate Change “there would likely be more significant implications for the State’s coal industry, particularly in relation to the long-term outlook for thermal coal’’.

Japan could be expected to increase its demand for thermal coal by 17 to 20 million tonnes a year and although Korea is building several new coal fired power stations they were only replacing units that were closing down.

India, however, was showing so much growth demand that it may replace the downturn in China.

“It is expected that, at the current rate of GDP growth, annual steel demand in India will grow threefold to reach 230 Mt by 2030-31,’’ Treasury said.

“If these goals are achieved, India’s coking coal demand may triple, from 47 Mt in 2017-18  to above 160 Mt by 2030-31.

“Given that Queensland is a major coking coal exporter to India, Queensland is likely to benefit from India’s planned steel industry expansion. Most importantly, the scale of Indian’s expansion, if it eventuates, is large enough to offset any potential reduction in demand for metallurgical coal due to the rising use of steel scrap in China.

However, thermal coal for electricity production would not have the same demand.

“The Indian Central Electricity Agency assesses that power plants designed to use domestic coal can meet their requirements from domestic sources,’’ Treasury said.

“Therefore, imported coal may only be required for power plants which may find imported coal more economical than domestic coal due to logistical constraints or those power plants designed for imported coal specifications. As such, India’s thermal coal imports may not surpass the record of 157.3 Mt (in 2019-20 India’s fiscal year) over the coming decade.’’