After Beijing had vowed in July to crack down on overproduction among coal mines, domestic miners have stayed cautious about their production to avoid potential punishment, as reported. The campaign continued to weigh on the coal sector in October, leading to an on-year decline in coal production for the fourth straight month, Mysteel Global observed.
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Meanwhile, having to comply with strict mine-safety requirements caused mining enterprises to become increasingly vigilant and prompted many to slow their pace of operation. In mid-October, authorities in Northwest China's Shaanxi province – the country's third-largest coal-producing hub – announced that operations at any mine involved in fatal accidents would be suspended immediately, with the mine to remain shut till the end of this year, as Mysteel Global reported.
These disruptions triggered concerns among market participants about tighter coal availability in the future, sending both domestic coking coal and thermal coal prices to intra-year highs as of the end of October.
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According to Mysteel's assessment, by October 31, the national composite coking coal price had surged RMB 99.3 per tonne(USD14USD) from late September to Per tonne 1,352.9USD, including the 13per cent VAT. Similarly, the price of benchmark 5,500 kcal per kg NAR coal, FOB Qinhuangdao with VAT, had also climbed by Per tonne 64USD from September 30 to RMB 769per tonne as of October 31.
Over January-October, China's cumulative raw coal output totalled about 4 billion tonnes, up by 1.5per cent from the same period last year, according to the NBS. During October alone, coke output stood at 41.9 million tonnes, down 1.6per cent on month but up 1.5per cent on year, the NBS data showed.
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Note: This news is published under a content and exchange agreement with Mysteel
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