Government policies have been used to control China's coal market for the second consecutive year. To ensure coal and related industries operate stably, the government has announced more policies affecting both supply and demand. We believe this intervention will continue in the near term. China will drive global coal prices in the near term. However, growing demand elsewhere in Asia will drive China's domestic coal prices in the long term. Demand for both thermal and metallurgical coal will decline in the long term. On the thermal coal side, energy demand per capita is reducing as China's economy shifts from manufacturing to services. Meanwhile, coal's share in energy demand is reducing as demand increases for renewable energy sources. On the metallurgical coal side, the use of more scrap in the steel industry is taking its toll on hot metal and subsequent coal demand.