Most of the small collieries (under 300,000 tonnes annual production) in Shanxi province have already been shut, mostly privately owned mines that supply 90% of the high-quality coking coal in the province.

Reports from China say that the only cokeries able to maintain production are the relatively large companies that are vertically integrated into coal mining, and even then they can only secure coal for their main plants and coal supply to their satellite plants for OEM production has been reduced dramatically.

Market watchers expect the tightness in the coking coal market to continue for the foreseeable future.

In the first half of 2002, China issued export licences covering 6 million tonnes of coking coal, but the number is expected to be reined in during the second half.

Chinese coal imports are also on the rise, with the Shandong Inspection and Quarantine Bureau inspecting 17 batches of coal totalling 969,500 tonnes during the first quarter.

In 2001, Shandong handled 10 batches of mainly thermal coal totalling 173,200t.