China well-supplied with coal for winter, says industry group

China’s coal market will remain amply supplied into the fourth quarter despite peak winter consumption, and the fundamentals are expected to remain much the same next year, local media reported on Tuesday, citing the China Coal Transportation Association.

China is the world’s top coal producer and consumer. Abundant domestic supplies have kept prices depressed and dampened its appetite for imports.

Should China’s economy grow at a weaker-than-expected pace next year, the domestic coal market would easily tip into a state of oversupply, the China Securities Journal quoted Bin Haoxiang, director of the association, as saying at an industry conference.

The association also said China’s coal consumption is expected to grow about 3 per cent per year and reach 4.8 billion tonnes by 2020, the Securities Times reported.

Coal arrivals into China in September slipped 0.9 per cent from August to 25.7 million tonnes, as a narrowing price arbitrage has made overseas supplies less attractive. Imports in the first nine months of this year rose 18.5 per cent, down from 34 per cent in the same period last year.

China’s steam coal prices edged higher last week, posting their first weekly gain in 11 months as winter restocking by utilities coincided with a two-week planned maintenance of the main coal railway, and a pick-up in the economy could be buffering demand, traders said