China may face shortage of 56m tons of coking coal

China may face a shortfall of 56 million tons of coking coal this year, the China Securities Journal reported on Tuesday, pushing Chinese steel mills to look further afield to make up the supply gap.

China is expected to produce 513 million tons of coking coal, used in steel production, in 2011, but total consumption is expected to reach 569 million tons, the paper said, citing forecasts made by top Chinese coal miners and analysts at an industry conference.

Faced with a widening supply gap, Chinese mills are set to boost imports from countries such as Mongolia, Russia and Australia.

However, import growth for the year is expected to fall to around 10 percent, compared with the stellar 37.3 percent growth posted in 2010, said Shanxi Coking Coal Group Ltd General Manager Liu Shengrui.

China imported 47.27 million tons of coking coal in 2010, with imports from neighboring Mongolia surging 278 percent to 15 million tons, trailing behind top supplier Australia's 17.4 million tons.

Global coking prices are forecast to rise strongly the first half of this decade, as producers struggle to keep pace with surging demand led by steel makers from China and India.