May 16, 2024

Second batch of coal export quota or contraction in 2008

On July 10, officials from the National Development and Reform Commission stated that the second batch of coal export quotas for 2008, scheduled for release in July, will surely shrink.
“In addition to the long-term agreement between Japan and South Korea, the issuance of new quotas is hard to say.” On the afternoon of the 10th, officials of the Ministry of Commerce’s Foreign Trade Department also stated that domestic coal should give priority to domestic demand without violating international trade contracts. .
In fact, domestic coal shortages and coal prices have risen again. Orient Securities analyst Wang Shuai predicted that "the supply in 2008 is extremely tight." In 2008, the domestic demand for coal will increase by 8% over 2007. In 2007, China’s coal consumption was approximately 2.53 billion tons.
Data show that China's coal exports in June rose 83.5% over the same period last year, to 6.99 million tons; January-June coal exports 25.49 million tons, an increase of 10.2% over the same period last year.
There are rumors that the country intends to cut coal export quotas in the third quarter, which caused panic among coal exporters in the second quarter and increased export efforts. In the first half of 2008, 31.8 million tons of coal export quotas were issued. According to current trends, the second half of the year may be compressed.
“China’s coal export program in 2008 was 49 million tons.” Zhang Wei, an analyst in the coal industry, recalled that since 2006, China has been adopting a tight coal export policy: In 2003, China’s coal export quota was 100 million tons. It will be reduced to 70 million tons by 2007.
“Suppressing the export of coal is in line with the government’s current adjustments and adjustments.” Wang Shuai, an analyst at Orient Securities, said that the best way to prevent companies from defaulting is to reissue part of the quotas according to the remaining number of long-term agreements with exporting companies.
“The supply of domestic coal is tight, and the government is restraining the export of resource products. It is mainly to protect domestic coal supply,” said Zhang Wei.

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