Asia thermal coal demand seen growing 8.7 pct -ABARE

By Fayen Wong

SYDNEY (Reuters) - Asian demand for thermal coal will grow more quickly than expected this year and next, underpinned largely by red-hot consumption in China and India, an Australian government forecast showed on Monday.

In an updated quarterly forecast, the Australian Bureau for Agriculture and Resource Economics (ABARE) said demand for imported coal in Asia would rise as much as 8.7 percent, or 28.9

million tonnes this year, up from its previous forecast in June for a 17.2 million tonnes increase.

"Asia is forecast to remain the fastest-growing thermal coal import region," ABARE, the economic research body for the world's number two thermal coal exporter, said in a report.

The bureau said that Asian demand in 2008 would grow by another 20.1 million tonnes or 5.6 percent, up from the previous

16.4 million tonnes or 3.1 percent forecast.

Growing demand from China, which is building coal-fired power plants at a rate of one a week, has seen a dramatic fall in its net exports since last year and helped coal prices to rally this year.

ABARE said China was expected to turn net importer this year and revised up its estimated Chinese import growth for 2007 by 37 percent to 46 million tonnes. Imports in 2008 were forecast to grow a further 7 percent to 49 million tonnes.