Japan warns on Australian coal sales: Report

A leading spokesman for Japan's energy industry on Thursday said rival coal-producing nations China and Indonesia were applying increasing competitive pressure on Australia, Asia Pulse reported Tuesday.

Hitoshi Suzuki, general manager for fuel at Tokyo Electric Power Co (TEPCO), also voiced concerns about the flexibility of Australia's coal producers.

Suzuki praised Australia, Japan's biggest coal supplier with two-thirds of the market, for expanding infrastructure in line with export volume.

He also pointed to Australia's good export quality, and productivity gains in recent years.

"Nevertheless ... I would like to point out a concern: a long queue of coal vessels waiting at Newcastle Port," Suzuki told a coal exporters conference in Sydney on Thursday.

"That (has) serious effects on our procurement schedule."

He said a solution appeared to have been found, but he hoped it would not lead to "diminishing flexibility of sellers' operations".

Suzuki said Japan's future coal requirements were likely to be affected by near non-existent economic growth forecast in that country in coming years.

As well, the country's commitment to the Kyoto protocol and deregulation of the electricity industry would significantly affect demand for coal.

"Given these circumstances, it is likely that the power demand forecast ... will be revised a little downward in the future," Suzuki said.

Demand was currently forecast to be 70 million tons in the year ending March 31, 2012, from 65 million tons a decade earlier.

But despite the downward revision, imports from China and Indonesia were expected to increase.

"As for China, (Japanese power companies) are steadily expanding the import like the previous year," Suzuki said.

He said China's export coal had many similar qualities to Australian coal, "and as such competes with Australian coal".

Indonesia, whose rate of export growth exceeded China's, also supplied good quality coal - low ash content and high volatility - at competitive prices.

"Given the fact that ash disposal is a critical issue in Japan, Indonesian sub-bituminous coal will likely be utilised more widely in the future because of its low ash content and price competitiveness," he said. (*)