China's Continuing Coal Crisis

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Through our discussions with industry experts we understand the causes of this coal shortage across the region appear to include booming demand well in excess of previous expectations; transport infrastructure bottlenecks; mine closures due to safety and environmental considerations, which have continued, having a particular impact on coking coal supply and deterioration in coal quality.

Macquarie sponsored a two-day conference in Beijing last week. The Asia-Pacific Coal Market Summit was organised by the China Coal Transport and Distribution Association (CCTD) and featured speakers from the Chinese government, industry associations and the producing and consuming industries.

Our main impression was of a chronically tight coal market (both for thermal and coking coal) with little short-term relief in sight. Through our discussions with industry experts we understand the causes of this coal shortage across the region appear to include booming demand well in excess of previous expectations; transport infrastructure bottlenecks; mine closures due to safety and environmental considerations, which have continued, having a particular impact on coking coal supply and deterioration in coal quality.

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