The top coal producers of China will be meeting this Tuesday for discussing the plans in order to stabilize the output this year, as per a report from Shanghai Securities News. The meeting that is organized by the CCA (China Coal Association) will be assessing the present operations and exploring further measures in order to ensure a highly stable output, as stated by the News Report.
There were talks in the market, which conveyed that the government will be reinstalling the everyday limits on the coal mining output after this winter heating period. This went on to push up the thermal coal futures the previous week. The coke as well as coking coal future rose last Monday after Beijing went on to suspend the imports of the North Korean coal as part of the attempt for implementing the UN (United Nation’s) sanctions against the country.
The output cuts that were introduced in the month of April 2016 actually ordered mines for limiting the number of days they go on to operate every year to 277 from around 330 as a part of Beijing’s effort of cutting the inefficient surplus capacity. However, the limits were actually abandoned in the month of November after a dual digit percentage drop in the output caused quite a sharp rally in the prices prior to the key winter heating season.
The report conveyed that the Shenhua Group, the CNCG (China National Coal Group), and the others that are backing the renewed cuts to around 276 working days from the 330 days, but which details on implementation still has to be worked out by Government. It stated that the targeted output cuts in the year 2017 are now expected to be lesser than that of the last year; however; it is much more difficult to achieve it though.
Recently, there was news about China not willing to buy coal from North Korea this year. China, which is one of the biggest trading partners of North Korea, reacted on the test of the long range ballistic missile by declaring ban on coal from N Korea until the end of this year.
Some of the news reports stated that this decision by the Ministry of Commerce (China) that was jointly issued with the country’s Customs Agency was actually made to comply with the UN Security Council that China assisted in drafting and passing in November. The resolution 321 actually imposed some hard sanctions that are estimated to be costing N Korea around $800 million/year, after it basically carried out the 5th nuclear test in the month of September. Some really strict measures are being taken by the China Government lately to improve its economy.