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China's top coal miners push for Beijing to cap output again - sources
February 21, 2017 / 12:30 PM / 10 months ago

China's top coal miners push for Beijing to cap output again - sources

BEIJING (Reuters) - China’s major coal miners pushed for the government to reinstate limits on thermal coal output at an industry meeting on Tuesday citing weakening demand and growing supply, two sources briefed on the gathering said.

A driver gets off a loading vehicle at local businessman Sun Meng's small coal depot near a coal mine of the state-owned Longmay Group on the outskirts of Jixi, in Heilongjiang province, China, October 23, 2015. REUTERS/Jason Lee/File Photo

It’s not clear if a government representative was at the meeting, which took place at the China Coal Association headquarters in Beijing.

Beijing is considering reimposing tough measures to cut output after the peak winter heating season ends, spurring a rally in prices to three-month highs on Tuesday.

The sources declined to be named as they were not authorised to speak to the media.

If reintroduced, it would be the third major shift in policy by the government in the past year as Beijing aims to move the world’s largest energy market towards cleaner, renewable fuel sources, while ensuring utilities have enough fuel.

Executives from top miners China Coal Energy Co Ltd and China Shenhua Energy Co Ltd were among the attendees, sources said.

The companies and the Coal Association did not respond to requests for immediate comment.

Speculation about a cut pushed domestic thermal coal futures to 562 yuan ($81.66) per tonne on Tuesday, their highest since mid-November and up 16 percent since the start of the year.

In April last year, the government ordered mines to limit the number of days they operate each year to 276 days from 330 as part of its effort to cut inefficient surplus capacity, triggering an historic surge in prices as supplies to utilities tightened.

In November, the NDRC reversed the curbs in a bid to avert a winter energy crisis.

Some mining executives and analysts have said the government may take a more flexible approach to the policy this year, chastened by the wild price lurches in 2016.

Global miners were the main beneficiaries of the price rally, helping the industry exit a long bear market.

($1 = 6.8818 Chinese yuan renminbi)

Reporting by Meng Meng and Josephine Mason; editing by Jason Neely and Louise Heavens

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