Macarthur Coal sees signs of rising demandClancy Yeates June 18, 2009 MACARTHUR COAL is the latest coal producer to raise hopes of a revival in demand for fuel from Chinese steelmakers.
The miner said there were "early indications" Australian exports of coal to China had risen more than eight-fold last month, from less than 500,000 tonnes in April to 4.1 million tonnes.
Macarthur's chief development officer, Shane Stephan, said Chinese steel prices were "quite encouraging" after posting a steady recovery since April.
"The metallurgical coal market is showing tentative signs of recovery with renewed customer interest," he said in a presentation to investors in Sydney.
The company only began selling to the Chinese market this year, a market which has been hit by a shortage of supply amid a pricing dispute between Chinese producers.
Macarthur sells pulverised coal which fetches lower prices than metallurgical coal, the highest quality material used to make steel.
Coal producers have endured a slump in prices from record highs after the collapse of the global steel market, which has fallen 25 per cent a month since the onset of the global financial crisis. While demand from steelmakers in Europe is sluggish, China's share of world production has grown from about 35 per cent to almost 50 per cent.
The executive general manager of corporate development at Macarthur Coal, Ian McAleese, said although the company was uncertain about the longevity of Chinese demand, feedback from customers was positive.
"The longer [the revival in demand] goes on, you're more inclined to think it might continue," he said.
Chinese demand for thermal coal burned in power stations has also surged in recent months, with Anglo-Swiss giant Xstrata earlier this month saying it had more than offset falls from its developed-world customers.
Yesterday, Macarthur shares fell 1.5 per cent to $6.62.
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