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Four implications of China coal sector overcapacity

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Report summary

Several sectors of Chinese industry are facing overcapacity issues. The government recently announced a plan to tackle overcapacity in the domestic coal sector. The Insight discusses implications of the government action on coal markets.

What's included

This report contains

  • Document

    China coal sector overcapacity FINAL.xls

    XLS 226.50 KB

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    Four implications of China coal sector overcapacity

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  • Document

    Summary slides.pdf

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Table of contents

  • Executive summary
  • What led to the overcapacity in the coal sector?
    • Mine closures: rapid elimination of excess capacity to result in large lay-offs
    • Industry restructuring: larger companies to acquire smaller mines to accelerate consolidation
    • Backward integration: encourage large consumers in the power, steel and chemicals space to acquire coal mines to secure long-term supplies
    • Domestic protectionism: export duty removal and VAT rebate allowance to increase exports
  • Conclusion

Tables and charts

This report includes 6 images and tables including:

Images

  • Ratio of coal production to approved capacity by province, %
  • No of mines and average mine-size in China
  • No. of mines and average mine-size in key provinces
  • China productivity range by mining method and comparison with Australia (raw tpey)
  • Domestic coal sector costs, revenue and cash flows, US$ billion
  • A comparison of Chinese and Australian bituminous thermal coal prices delivered into Japan, US$/t

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