Commodity Market Report
China coal long-term outlook H2 2019: supply-side reform will stabilise prices
This report is currently unavailable
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Supply-side reform has been key in China managing its domestic coal market in response to prices. Compliant supply has been gradually added to bring prices down. But the market is now close to oversupply. As a result, we expect the government to adjust its policy, to keep prices within the desired range in both the near term and long term. Thermal coal imports have kept increasing from 2015 to 2019 as the price arbitrage has widened. However, the forthcoming oversupply will narrow the gap. We expect demand for thermal coal imports will stabilise at 100 Mt in the long term. After peaking at RMB1,865/t in 2018, benchmark Liulin #4 CFR Tangshan metallurgical coal prices will keep falling, before mildly recovering and flattening out from the late 2020s on to 2040. However, despite overall metallurgical coal demand decreasing after 2020, domestic supply will also decline. This will support seaborne coal imports to remain high and even increase in the long run.
Other reports you may be interested in
Country Report
China iron ore supply summary
Lower prices, falling demand and competition from seaborne imports will cause Chinese iron ore supply to decline over the long term.
$6,750
Insight
China economic focus July 2025: is another supply-side reform on the cards?
Chinese industries have excess capacities that are advanced in technology and low in cost.
$1,150
