Coal Miners Tumble As China Aims To Cool Price RallyBy Shuli Ren
Chinese coal miners tumbled in Hong Kong as markets worry that Beijing will halt thermal coal’s hot summer rally.
Qinhuangdao thermal coal prices have climbed to 470 yuan per ton on August 17, the latest data available, from 400 yuan per ton just two months ago. This 17% rally is too much for China’s regulators, who are now pushing the coal miners to increase production.
Deutsche Bank‘s James Kan thinks Beijing will want thermal coal prices to return to 450 yuan per ton. He wrote:
When the QHD coal price rises above the RMB450/t level, the NDRC would assign qualified coal miners to increase production. When the coal price falls below the RMB450/t, a strict 276-day policy would resume.
The NDRC seems to be aiming at keeping a stable coal price so that coal producers and IPPs can have stable profitability.
This morning, China Shenhua Energy (1088.Hong Kong) tumbled 4.9%, Yanzhou Coal (1171.Hong Kong) dropped 3.7%, China Coal Energy (1898.Hong Kong) retreated 3.5%.
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... ice-rally/
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