Fluctuations in the price of thermal coal is a manifestation of the interactions of variations in supply and demand. The demand side is primarily influenced by political decisions particularly in China where its reliance on imports is to be reduced and in India where it is proposed to stop the need to import coal by increasing national production. In China and India, the demand for imported thermal coal is a second derivative of the balance between domestic supply and domestic demand as both countries work towards achieving self-sufficiency. Whereas Japan, Korea, and Taiwan provide a more stable and predictable demand for thermal coal. It has been estimated that if China alone ceased the importation of thermal coal there would be a supply excess of approximately 15% in the producing countries of Australia, Indonesia, USA, and Russia.
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