简体中文
China's coal industry is likely to usher in a new round of consolidations following the announcement of China's safety watchdog on tightened approval for new coal mine projects in 2013.
The State Administration of Work Safety clearly stated that high-gas coal mines with an annual production of less than 300,000 tonnes, as well as coal and gas outburst mines with an annual production of less than 450,000 tonnes, will not be approved in 2013. This is expected to help soothe the pain that China's coal industry is suffering from overcapacity.
Currently, China is facing serious oversupply of coal. Statistics from China Coal Industry Association, China's coal output rose 4 percent on year to 3.66 billion tonnes in 2012, and coal imports surged 29.8 percent on year to 289 million tonnes. However, the coal exports in 2012 plunged 36.8 percent on year to 9.28 million tonnes.
Affected by the surge in coal imports, domestic coal stocks in China continued hiking while coal prices kept declining. By the end of 2012, the coal stocks increased 58 percent on year to 85 million tonnes at coal enterprises, and rose 26.8 percent on year to 43.51 million tonnes at major ports. The price for 5,500-kilocalorie power coal at Qinhungdao port decreased 170 yuan/tonne from the year-beginning to 630-640 yuan/tonne by the end of 2012.
Insiders believe that coal production capacity would boom up in the latter three years of 2011-2015 (2013-2015) with an estimated annual release of 400-500 million tonnes, while coal consumption in the same period is expected to rise only 200 million tonnes annually, posing severe challenge in oversupply.
With implementations of consolidation measures, the inefficient and outdated capacity in coal industry will be phased out, leaving large coal groups to survive, said insiders.
