- World’s largest coal producer seeking to ease a glut
- Nation’s coal output fell 11% in April from year earlier
China’s benchmark coal prices climbed to the highest since September as government steps to curb supply amid a glut started to take effect.
Spot coal with an energy value of 5,500 kilocalories per kilogram at the port of Qinhuangdao, China’s benchmark grade, rose 10 yuan to an average 395 yuan ($60) a metric ton as of Sunday, according to data from the China Coal Transport and Distribution Association in Beijing.
The world’s largest coal producer is seeking to ease a glut of industrial capacity as it shifts toward consumer-led growth and tries to curb pollution. The nation’s coal production fell 11 percent to 268 million tons in April. That’s the biggest slump in data going back to April 2015, when the bureau resumed releasing coal production figures.
“We believe the supply-side reform impacts are kicking in and should sustain,” said Michelle Leung, a Hong Kong-based analyst at Bloomberg Intelligence. “Demand is still weak.”
Qinhuangdao coal prices may rise 20 percent to 450 yuan a ton by December, Citigroup Inc. analysts Jack Shang and Claire Jie Yuan wrote in a research note last week. The government has asked domestic miners to cut output by 16 percent and reduce their operating days to 276 from 330 annually, according to the report.
— With assistance by Jing Yang