India’s aspirations to become a major steelmaker will help lift metallurgical coal prices and offset concerns about China’s sluggish recovery, according to an Australian producer.
Infrastructure-related stimulus packages in India will drive demand for the blast-furnace fuel, Coronado Global Resources Inc.’s Chief Executive Officer Douglas Thompson said Tuesday. That comes as the nation prepares for elections next year with a “fair amount of stimulus” likely in the lead up to voting, he said.
“India is, I think, the shining light on the horizon,” Thompson said. That marks a contrast with China, where the impact of recent stimulus measures are struggling to gain traction, he said.
Indian demand for coking coal, while currently weak, is expected to return — and continue expanding — once the country’s monsoon season ends later this year, Coronado said in an earnings statement. The nation is investing more in steel, with the intensified focus on production likely to persist well beyond a bid to win election support, Thompson said.
That would be good news for metallurgical coal producers, which have seen prices more than halve after hitting a record in March 2022. The declines have been driven by broad global economic uncertainty, and concerns over China’s struggling recovery in particular.
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