ANALYSTS are predicting a rebound for coking coal prices as China becomes a net importer of coal for the first time in its history.
Recent data shows the resource-hungry nation imported 14.3 million tonnes of coal in the first quarter of 2007, a 60.4 per cent rise over the three months ending March 31, 2006.

That compares with a fall of 32 per cent for coal exports to 11.4 million tonnes over the same period.

China consumed about 2.36 billion tonnes of coal in 2006. The country was once the second-biggest exporter of coal in the world behind Australia.

The recent turnaround in China’s attitude to domestic coal production is behind the change in direction and is good news for Australian miners.

Chinese authorities have claimed to have cracked down on the domestic small-scale coal producing industry - notorious for many of the estimated 6000 deaths of miners every year - by closing thousands of mines.

Analysts suggest that might cost 380 million tonnes of production to the end of the decade.

The Chinese Government has also levied coal export duties on miners, further discouraging outward-bound movement of resources and protecting domestic reserves.

It is good news for Australian producers which are going through a consolidation phase for mid-tier miners.

Many miners already have close ties to Chinese players.

Beijing’s investment arm, Citic, has a 12 per cent stake in Macarthur Coal. Yanzhou Coal, China’s biggest listed player, recently revived the Southland Mine in the NSW Hunter Valley.

MinMetals and China Coal are also looking for assets while China Coke & Coal bought out junior explorer Rocklands Richfield in a reverse takeover.

According to reports from the China Daily, 84.1 per cent of Chinese coal imports come from Association of South East Asian Nations members and Australia.

Citigroup analysts have predicted that the spot benchmark price for hard coking coal will be $US95 a tonne in 2008 before rising to $US110 a tonne the following year.

Thermal coal was forecast to fall to $US48.50 a tonne next year from the $US50.25 a tonne in 2007 and fall even further to $US45.75 a tonne in 2009.

JP Morgan has forecast a 9.3 per cent rise for thermal coal to $US54 a tonne from April 1 next year. It has also predicted thermal coal prices will slip to $US46.9 a tonne in 2009.

In February, Australian coking coal miners reported a 12 per cent fall in prices to $US73 a tonne.

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