China’s Top Coking Coal Miner
Calls on State to Control Supply
Beijing
should control mining activity, limit output and consolidate smaller producers
into state-owned firms to “reduce disorderly competition,” Shanxi Coking Coal
Energy Group Chairman Zhao Jianze told local media. China should also build
strategic reserves of the steelmaking fuel, which he called “a ballast stone in
China’s industrial economic system.”
While blessed with an abundance of thermal coal for power
generation, China’s reserves of the steelmaking variety are far more scarce.
That’s led to an over-reliance on imports, which has created vulnerabilities. A
ban on Australian supplies — the only effective substitute for Chinese coking
coal, according to Zhao — drastically curtailed shipments for more than two
years before it was lifted in early 2023.
Zhao is a national committee member of the Chinese People’s
Political Consultative Conference, one of two legislative sessions being held
in the capital this week. Officials typically use the meetings to catch the
attention of policymakers as they draw up the government’s agenda for the year
ahead.
Coking coal producers have suffered an outsized impact in recent
months from a spate of fatal mining disasters in China, which has disrupted
operations and curbed supply. The protracted slump in China’s property market
is also sapping demand from their customers at steel mills.
On the Wire
China’s CPI likely rose out of deflation for the first time in
five months in February, lifted by holiday demand around the Lunar New Year,
according to Bloomberg Economics. That’s not a sustainable driver, nor does it
mean deflationary pressures fading.