China Launches Its First Coal Price Index

China Launches Its First Coal Price Index

China, the world's largest coal producer and second largest economy, has launched the country's first coal price index. Ceres futures broker Jane Yang suggests that the launching of the index will aid in giving China a more accurate price and demand outlook.

Jane Yang Futures Broker Ceres Ltd.

 

According to Chinese State Media; the index, which will be released by China Taiyuan Coal Transaction Centre and China Finance Corp, will initially collect samples from 144 monitoring points in coal-rich Shanxi Province, which it will use as a base. The index will then be expanded to other major coal-producing bases such as Inner Mongolia Autonomous Region and the provinces of Shaanxi and Henan.

David Nealis President Ceres Ltd.

Approvals for small coal mines in China are to be halted

Approvals for small coal mines in China are to be halted

David Nealis President of  Ceres Ltd.

 

The Chinese State Administration of Work Safety stated on February 25, 2013 that it will no longer approve new coal mines that do not meet production capacity requirements in 2013.

High-Gas Coal mines with an annual production of less than 300,000 metric tons, as well as coal and gas outburst mines with an annual production of less than 450,000 tons.

The reason stated were for safety issues, but in my opinion I believe it’s an attempt to drive up slumping  domestic coal prices and to be able to better regulate producers in the future.

China’s coal demand slows as the economy wobbles

David Nealis President of Blue Bridge

China’s coal demand slows as the economy wobbles

China's ports are becoming overwhelmed with stockpiles of coal as the Chinese economic slowdown has substantially slowed domestic demand for the resource.

Coal stockpiles at the Qinhuangdao, Huanghua and Tangshan ports in north China's Hebei province have risen to 16 million tons, according to a statement recently posted on the website of the Hebei Port Group Co.

The nation's coal demand has slowed in recent months as domestic economic growth has decelerated amid the sluggish global economic recovery, the ongoing eurozone debt crisis and weak US demand for Chinese products.

The manufacturing slow down curbed China’s power consumption, in the first five months of 2012, gross power consumption increased 5.8 percent year on year to 1.96 trillion kilowatt-hours, much lower than the 12-percent increase registered during the same period last year.

China, the world’s 2nd largest economy, continues to be the most important market for companies looking for growth and Chinese companies continue to globalize by investing and selling their products in new markets; what is your company’s strategy for engaging China?

 

Futures and Options Risk Disclosure
Trading futures and options involves the risk of loss. You should consider carefully whether futures or options are appropriate to your financial situation. You must review the customer account agreement and risk disclosure prior to establishing an account. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. Past results are not necessarily indicative of futures results. The risk of loss in trading futures or options can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.