China Coal Prices to Recover in September
Coal prices is expected to recover in September as it rides of an uptick in the thermal power production and government measures that will likely boost domestic economy even with limited coal production. Thermal coal prices remained unchanged this week, but after declining for 13 consecutive weeks experts said that coal prices may have bottomed out.
According to Bohai-Rim Steam Coal Price Index that tracks four types of coals in six ports, coal prices was at 626 yuan per metric ton on August 15 and remained unchanged from the previous week. Prices seemed to bottom out and might rebound in mid September by 15 or 25 yuan per metric ton. This will track domestic economy and industrial activity for the months ahead.
Prices is said to pick up in September just a few weeks ahead of peak winter demand. As the government started to implement measures to boost economy in May by encouraging private investment especially in the energy infrastructure. The china central bank has also cut their reserve requirement ratio to boost liquidity, while also cutting interest rates twice and a possible third cut soon.
Thermal power output is said to recover next month after slowing on year for four straight months because of the higher demand in hydro power production.