China aims to cut the capacity of its coal mines by 300m tonnes a year until 2020 even as production and consumption of the fuel increases, according to the country’s top economic planner.
Beijing is targeting output of 3.9bn tonnes of coal in 2020, up from 3.75bn tonnes in 2015, said the National Development and Reform Commission, adding that consumption will rise to 4.1bn tonnes from 3.96bn tonnes over the same period.
Under the plan, revealed at the end of last week, the NDRC will cut 800m tonnes of “outdated” and inefficient coal capacity each year while adding 500m tonnes of “advanced” capacity. The reductions will be concentrated among smaller mines in the north-east. Big producers in the western regions, such as Inner Mongolia and Xinjiang, will boost supplies.
Surging coal prices were among the biggest surprises in commodity markets during 2016. After China introduced production curbs in April the price of thermal coal, used to generate electricity in power stations, more than doubled, reaching $110 a tonne in Asia as utility companies were forced to import material. International suppliers include BHP Billiton, Glencore and Rio Tinto.
煤炭价格飙涨是2016年大宗商品市场最大的意外之一。在中国于4月出台生产限制措施后，用于燃煤电厂的动力煤的价格上涨一倍多，在亚洲达到每吨110美元，因为公用事业公司被迫进口原料。国际供应商包括必和必拓(BHP Billiton)、嘉能可(Glencore)和力拓(Rio Tinto)。
The price of coking coal, a key ingredient in steelmaking, also surged as a consequence of the supply curbs, to more than $300 a tonne, making it the best performing commodity of 2016.
Those gains have faded as Beijing — alarmed by the spike in price — relaxed the controls. High-quality Australian thermal coal is trading around $94 a tonne, while premium hard coking coal has slipped back to $224.
With China the world’s largest coal consumer and biggest emitter of greenhouse gasses, Beijing has set aggressive targets to cut coal overcapacity by half a billion tonnes “over the next few years”.
The reductions reflect an effort to bolster prices and allow China’s chronically bloated state coal miners to repay loans. However, planners failed to account for the degree to which private miners had also dropped out of the market, and were caught off-guard when investors profited by the squeeze to drive up futures prices of coking coal.