No rapid overcorrection to global coal supply: Coal &amp&semicolan#38&semicolan Allied

<p>China and India will continue to provide further opportunities for seaborne traded coal and there is little danger of a rapid overcorrection to supply that market, Coal &#38 Allied said.</p> <p>The 75.7% Rio Tinto-owned company believes the present coal market is the strongest for a generation and will remain strong "with a positive outlook for price".</p> <p>"Export coal supply chains across the globe are operating at capacity, ensuring that the production surge which usually overcorrects in circumstances such as we currently face will not occur with the same speed as has been possible in the past," Coal &#38 Allied chairman Chris Renwick told the annual shareholders’ meeting in Sydney yesterday (Tuesday, April 26).</p> <p>China’s domestic demand for coal has halted growth in the country’s coal exports, Mr Renwick said.</p> <p>Both China and India are "emerging opportunities" for coal sales, he said.</p> <p>"While they are immature markets for seaborne traded coal, the sheer scale of demand from these countries may provide opportunities into the future," Mr Renwick said.</p> <p>There is also strong demand growth elsewhere in the Asia Pacific region &#8211 namely Taiwan, Korea and Japan.</p> <p>Mr Renwick also told shareholders that Coal &#38 Allied’s operations were benefiting from Port Waratah Coal Services (PWCS) capacity distribution system to tackle the vessel queue off port of Newcastle.</p> <p>Without the system Coal &#38 Allied estimates it would have absorbed a further $30m in demurrage costs during 2004.</p> <p>The company said it expected improvements to the coal supply chain into PWCS to "begin feeding through later this year".</p> <p>"However a full contribution to increased capacity is not likely to be in place much before the end of the second quarter 2006," Coal &#38 Allied said.</p> <p> </p> <br />