China coal short-term outlook December 2017: import ban lifted to feed power plant
Demand for both thermal and metallurgical coal ended 2017 on a better-than-expected note. Strong industrial performance and cold temperatures maintained a healthy appetite for thermal coal. When gas shortages struck, many households that had been encouraged to switch to gas for heating this year but found themselves freezing were allowed to revert to coal. Cokemakers were also called upon to make up for the intermittent gas supply, boosting metallurgical coal demand in the process, but highlighting flaws in China's efforts to curb pollution. A combination of policy and poor weather constrained supply, leading to a reported suspension of the seaborne import ban. But just how effective will this move be? And how have all of these factors influenced prices? More importantly, what impact is China's '2+26' policy to curb pollution having on the market?