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The demand for the coal market has not changed

August 29,2017      views

On August 24, vice President of China coal industry association zhi-min jiang said that China's current coal overcapacity, market oversupply of the fundamentals have not changed, began to shift towards easing gradually overall supply, forecast in the second half of the coal market will maintain the basic balance of supply and demand, but in some parts of the resources, transportation, the inherent tight problem may come up.


Jiang zhimin said that coal as the main body of China's energy has not changed. China's coal market will remain in balance in the future, but some issues cannot be ignored. From the perspective of demand, the total amount of coal will remain relatively stable, and the differences in seasonal and seasonal demand should be taken seriously.

"The steady growth of the macro economy will drive up coal consumption, especially during the winter heating period, and the average daily coal consumption will probably increase further. At the same time, the state regulates the atmospheric environment, controls the total consumption of coal, and the alternative role of non-fossil fuels to coal, and the excessive growth of coal demand will have a depressing effect. Jiang zhimin said.


On the supply side, Mr Jiang believes that coal production capacity is still large and the fundamentals of oversupply have not changed. Since 2016, China's coal mining industry has invested more than 4 trillion yuan in fixed assets, which has created enormous capacity. Although the two years have been phased out, the excess capacity has exceeded 400 million tons, but the potential capacity remains high.

According to the introduction, by the first half of this year, the country had pulled out of coal production capacity over 400 million tons and completed 50 percent of the target of the 13th five-year plan.


Jiang zhimin also pointed out that although domestic coal production has increased steadily, there are uncertainties. On the one hand, with the steady improvement of coal market, the enthusiasm of coal mine production will increase, and the national coal output will continue to increase. Countries, on the other hand, increase the intensity of coal production capacity to work, some ordered out backward production capacity, at the same time to strengthen the coal mine safety production, environmental protection and use of mineral resources, land use regulation, etc., some coal production capacity may be restricted, in the short term may be declined.

Zhi-min jiang proposed in particular, the recent market need to focus on the two events, one is in the northeast for coal, subject to the east and in the future some open-pit mine land management, the influence of open-pit mine production might be some recent decline, but the relevant departments are studying the countermeasures. Second, there are some environmental protection policies, which may have some impact on coking coal enterprises. Coal imports are also expected to fall in coming months. (source: Shanghai securities news)

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