Coal news and updates

Seven large Shanxi province-owned coal miners will be permitted to extend the maturities of some existing debt, the official Xinhua news agency reported Sunday, citing a document released by the Shanxi branch of China’s banking regulator. The document directs Shanxi banking sector institutions to help the firms convert short term liquidity loans into medium and long-term loans, Xinhua reported.

The Shanxi office of the China Banking Regulatory Commission could not be reached for comment. China’s coal industry, the largest in the world, has been punished by a brutal collapse in coal prices since late 2014. Despite a moderate recovery in recent months, Chinese benchmark thermal coal prices remain around 30 per cent lower than in 2014. South China Morning Post also reports that it was a ‘rare move’ by Shanxi Province’s deputy provincial governor to lobby institutional investors for funding saying it was his responsibility.

China’s legacy coal and steel regions have also been struggling to refinance themselves through conventional lenders, resulting in widening bond defaults in provinces like Shanxi and Liaoning. A recent Reuters analysis of central bank data found sharply rebounding dependence on expensive “shadow bank” finance in China’s rust belt as traditional lenders retrenched.

Source:IndianExpress