Hot Weather Bring Chinese Coal Market Back to Life

The price of steam coal in China is has raised nearly $8 in this week after its price decrease for 9 months. Traditional periodical business such as coal, cement, nonferrous metal industries is gradually getting back to life. The rising coal price is stimulated by mainly two factors.

The first reason is the adjustment of domestic coal price. The new policies focus on the deduction of taxes, which lowered the production cost of coal enterprises. The imported coal has less advantage in price. Therefore, Chinese coal enjoys a larger domestic market share.

The second reason is the continuing increasing temperature in China. The southern part of China is having extreme heat for days with the highest temperature reaching 44 centigrade (111Fahrenheit). The air conditioning and other cooling systems are consuming electricity in a record breaking speed, resulting in the power plants used up their coal stock. Most of the power plant in China still relies on thermal power,thus the domestic demand is increasing.

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