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7 Pages

Four implications of China coal sector overcapacity

Four implications of China coal sector overcapacity

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 includes 3 file(s)

  • Four implications of China coal sector overcapacity PDF - 357.14 KB 7 Pages, 0 Tables, 6 Figures
  • China coal sector overcapacity FINAL.xls XLS - 226.50 KB
  • Summary slides.pdf PDF - 916.84 KB


This Coal Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

Participants, suppliers and advisors can use it to look at the trends, risks and issues within the coal industry and gain an alternative point of view when making decisions.

Wood Mackenzie is the only coal industry service provider that offers a market outlook integrated with other sector analyses, including macroeconomics, coal supply, steel markets and gas and power markets.

Our coal analysts are based in the markets they analyse. They work with objective, proprietary data to help you maximise your current and future decision making. From market dynamics to trade patterns, we give you confidence in your strategic planning.

  • Executive summary
  • What led to the overcapacity in the coal sector?
  • Four implications of overcapacity
    • 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

In this report there are 6 tables or charts, including:

  • Executive summary
  • What led to the overcapacity in the coal sector?
    • Ratio of coal production to approved capacity by province, %
  • Four implications of overcapacity
    • 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
  • Conclusion
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