Shares of Chines coal miners slumping, after industry body said coal supply is sufficient

 

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Shares of Chinese coal miners are tumbling on Wednesday, with an index tracking the sector compiled by Wind Information slumping 5.6% as of 10:29 am local time, making it the worst-performing sector in the A-share market.

The selloff comes after coal miners staged a strong rally on Tuesday on expectation of higher demand and rising coal prices. As the high season is coming, average daily coal consumption is picking up and coal prices are expected to enter a new round of uptrend, according to a note from Industrial Securities. In addition, coal prices in the international market is still rising and China’s coal imports are trending lower, it added. Read more …

However, Zhang Hong, spokesperson of the China Coal Industry Association, said that the average daily coal output in China exceeded 12 million tonnes on the first five months of the year, hitting an all-time high, and coal supplies this summer will be sufficient.

In the five-month period, China’s coal output reached 1.81 billion tonnes, rising 10.4% from a year earlier and the country’s capability in ensuring coal supply has strengthened significantly, he said.

As of June 29, coal inventories at the nine ports in North China stood at 25.46 million tonnes, rising by 4.68 million tonnes from the same period last year, a historical high level, according to the association.

Data from the Ministry of Commerce showed that, in the period of June 20 – 26, China’s thermal coal price was 943 yuan per tonne, falling from previous days. In Inner Mongolia, a major coal production hug, average prices of 5,000 – 5,500 kcal/kg thermal coal was 659.72 yuan per tonne in the period of June 18 – 24, edging down 0.2% from the previous week, according to data from Inner Mongolia authority.