China�s importer status bodes well for coal prices

DURING January China switched from a net exporter to a net importer of coal, a shift that will help provide support for coal prices in the long term, according to Numis Securities analysts.

Angie Tomlinson

“We would expect that the ongoing growth in the Chinese coal market, a growing need for imports in conjunction with reduced exports to the global market, will help provide support for coal prices,” the analysts said.

In January China imported 4.7 million tonnes of coal, 1.5Mt above exports. The shift was attributed to the closure of many small mining enterprises. In the short term the closures could also push coal prices higher.

The shutdowns, coupled with higher demand due to the growing number of power stations that the country is building, will also contribute to price hikes.

“China is normally a net exporter of thermal coal, and we would expect that over the year ahead it will move back to being a net exporter; however, in future years it is likely to become a net importer,” Numis said.

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