Chinese rush to cut prices hurts imported coal demand

摘要

Chinese coal producers are competing to cut selling prices, a rush that is likely to weigh on domestic prices and dampen requirements for imported coal at a time when demand is already weak. Producer Shaanxi Coal and Chemical Industry Group (SCCIG), a major coal producer based in Shaanxi — the country’s third-biggest coal-producing province — in northwest China, has begun to offer discounts for bulk purchases. It is offering a 10 yuan/t ($1.41/t) discount for purchasers of more than 80,000 t/month of coal, and a discount of Yn5/t for buyers of 40,000-80,000 t/month. SCCIG linked the base price to a domestic spot index, which means that large buyers could possibly take the coal at final prices even lower than the steeply discounted price set by market leader China Energy Investment (CEI) of Yn521/t fob Huanghua port.