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Analyzing the Domestic Thermal Coal Futures.
Domestic thermal coal futures have halved over the past weeks after the government ordered top miners to slash prices to a set target and raise output.
The government’s National Development and Reform Commission (NDRC) said in a statement late on Thursday it had ordered top miners to cut prices for thermal coal used in power generation by at least 16 percent from July 1.
The state-owned Coal India will buy coal for $2.34 per tonne for the next three months, according to the government statement late on Tuesday. The minister quoted in the statement said that the move was “temporary” and that prices would be reviewed by an independent regulator on Nov
The Chinese government’s intervention in the market has had negative consequences. Imports are likely to slow in November and December after already slowing down in October.
Preliminary data from China’s General Administration of Customs show that imports grew by 2.5% YoY in October, coming in below consensus expectations. A sharp deceleration from September’s 11.8% YoY growth and August’s 9.8% YoY growth, pointing to a slowdown in domestic demand growth.
The deceleration of imports is due to weak global demand and rising trade tensions with the US, as both the value of imports and export fell in October. Weak trade data…
