ROCKMAN wrote:An update on the "King is dead!" idea being pushed back in 2014:
From the Financial Times this week:
"Australian thermal coal, the benchmark for the vast Asian market, has hit $100 a tonne, cementing its status as the best performing commodity of the year. A 25,000 tonne cargo of high grade material for November delivery changed hands on GlobalCoal, a physical trading platform, for $100 a tonne on Tuesday. The deal means benchmark prices in Asia have now doubled since June, a move that has wrong-footed analysts and traders as China has moved to curb its domestic output of the fuel.
Thermal coal is used to generate electricity in power stations and traders have been forced to scramble to find cargoes. This year’s rally has ended a five-year bear market that saw prices fall to around $40 a tonne."
It would appear the "King Coal is dead" gang are current being chased by coal zombies. LOL.
Early in 2016 the central planners of China attempted to avoid a glut by closing many small mines and reducing hours worked at several of the larger ones. Then in late August or early September they realized they had reduced production too much and were looking at a shortfall in supply for the winter months when usage is highest. They immediately increased hours for workers at the giant state owned mines but it was clear this would not be enough so they started buying international coal for delivery before winter to prevent a shortfall.
Ta Da Government planners once again prove their usefulness at predicting the future.
http://www.steelorbis.com/steel-news/la ... 953650.htm
At a press conference held by China’s National Development and Reform Commission (NDRC) on October 13, NDRC spokesman Zhao Chenxin stated that the NDRC together with relevant government departments have taken effective measures to stabilize coal supply and curb rapid rises in coal prices. For instance, at the beginning of September, they launched their second-level response, increasing overall Chinese daily coal output by 300,000 mt; in late September, they launched their first-level response, raising daily coal output by 500,000 mt. Meanwhile, they have further plans to relieve the shortage of coal supply: for example, some approved coal mines will be able to increase their number of working days in the fourth quarter of this year. On October 10, coal stocks at major power plants amounted to 59.88 million mt, up 9.18 million mt or 18.1 percent compared to the end of August, while coal stocks at Qinghuangdao port totaled 3.6 million mt, up 0.98 million mt or 37.4 percent compared to the end of August. This indicates that the measures taken by the NDRC and relevant government departments have shown some impact.
The NDRC spokesman also mentioned that the supply shortage and rises in coal prices were not only due to production cuts, but also due to some other elements.
First, China consumed more coal in thermal power generation as high temperatures and lack of rain continued in most regions from July on. Meanwhile, overall Chinese hydropower generation has declined sharply; for instance, hydropower generation increased by four percent year on year in January-June, while decreasing by 12.8 percent year on year in September. At the same time, household electricity consumption rose sharply due to high temperatures. In July, August and the first 20 days of September, thermal power generation increased by 4.8 percent, 7.3 percent and 12.9 percent year on year, respectively.
Secondly, illegal production and low quality coal production have been effectively curbed, which reduced coal supply to the market.
Thirdly, rainy weather has negatively affected coal transportation in some regions, while the new road traffic management regulations in China have also impacted coal transportation.
In addition, Mr. Zhao also said that, since the period for building up coal inventory for winter usage is approaching, the NDRC and relevant departments will remain in close touch with coal producers and downstream users, in efforts to stabilize coal supply and coal prices in the coming period.