Coal news and updates

China’s tight environment curbs hit met coal sector, squeezing supply: sources

Tight control measures implemented by China’s Ministry of Ecology and Environment in the third quarter of 2021 has impacted operations of the metallurgical coal sector, leading to a cut in run rates and spot supply squeeze, sources said Sept. 7.

MEE said that its staff since late August has stayed in Shandong, a key Chinese met coal hub, and would continue to station there until Sept. 26 to conduct safety inspections.

China-based Guosheng Securities in its 2021 sector report said it sees Chinese met coal supply to shrink, citing domestic environment protection and safety rules.

Another factor that is expected to disrupt China’s met coal supply is Shandong coal sector being asked to retire 34 million mt/year of old coal output capacity in 2021, according to Guosheng Securities.

Meanwhile, current high met coal prices have spurred the Chinese government to impose strict price controls, capping unreasonable price rises, Kaiyuan Securities said in a latest report.

Domestic prices were seen at Yuan 3,735/mt ($578/mt) on Sept. 1 for premium low-vol hard coking coal in the Shanxi province, up 48.5% from early August, according to S&P Global Platts data.

Domestic prices have been seeing fresh record highs in recent weeks, as local steelmakers were turning to Chinese supply for their requirements amid absence of traditional import sources.

Coal from Australia remains unavailable for China after an unofficial ban in the fourth quarter of 2020, while another major supplier Mongolia is facing issues as renewed concerns over COVID-19 impacts transportation.