<td id="chjkc"><wbr id="chjkc"></wbr></td>

    <wbr id="chjkc"></wbr>

    <tr id="chjkc"><legend id="chjkc"></legend></tr>
    En20120724001.jpg
    About us Advertisement service Contact us Into the Chinese
    Home Macro-economy Steel News Raw Material Equipment & Technology Steel End-users Products
    Steel News Daily
    Raw Material
    Coal shakes dirty image to stage comeback
      Release time: 2017/01/09 10:37:00  Author: 

    Coal, a high-profile villain in smog-choked northern Chinese cities this winter, enjoyed a bit of market comeback in 2016 as its price recovered from a long slump. The gains may extend into the new year, albeit authorities are reluctant to see that happen.

    As a core part of China’s supply-side reform to trim overcapacity, the performance of coal in the past year has created complexities. The conundrums are that although China has taken efforts, the industrial structure has not been ready to follow.

    The benchmark Bohai-Rim Steaming Coal Price Index surged to a two-and-half-year high of 607 yuan (US$87) per ton in early November. Futures for coking coal used in steel production doubled to 1,177 yuan a ton over the past year.

    Underlying the gains has been the government’s policy of curtailing supply by closing smaller, dangerous or inefficient mines. The National Development Reform Commission oversaw a reduction in total output of more than 250 million tons of coal last year, as of mid-December.

    Although coal gets a black eye for the damage caused by its burning to the environment, it remains cheap and plentiful, crucial to electricity generation, heating and steelmaking.

    “It even boosted several related industries when its price surged,” said Jiang Mingde, chief economist at Hengtai Futures Co.

    ‘Unexpected’ source of profit

    Due largely to rising coal prices, industrial raw materials such as steel and nonferrous metal also surged, contributing to the overall profit growth.

    China’s industrial profits posted an annual growth of 9.4 percent over the first 11 months last year, 67.9 percent of which was “contributed by the commodity price rebound,” the National Bureau of Statistics said.

    Despite the growth, authorities seemed unwilling to admit coal price’s contribution, as officials at the development commission said the surge was “unexpected” and “beyond normal.”

    They do have a point as high coal prices increased costs and hit profits for downstream producers such as electricity plants.

    While the price rebound boosted the profits of coal companies — which over the first 11 months jumped 156 percent from a year earlier — “it hurt the thermal power plants,” said Zhang Lin, vice director at the China Electricity Council.

    In September the major five electricity groups posted losses totaling 300 million yuan, compared with a 6.4 billion yuan profit in the same period in 2015. In October, that loss deepened into 2.6 billion yuan.

    But why does coal matter so much if its production and use are expected to fall?

    Just last month, the development commission announced the 13th Five-year Plan for energy, which pledges 15 percent of the nation’s power should be generated from renewable resources by 2020, up from the 12 percent at the end of 2015. And the proportion of thermal power should be suppressed to below 55 percent, from 75 percent now, by the end of the plan.

    But the reality is not so much optimistic as alarming, with electricity giants’ massive losses.

    In November, four of five major power groups — China Huaneng Group, China Huadian Corp, China Datang Corp and China Guodian Corp — submitted a joint letter to the government of Shaanxi province, the country’s major coal source, asking it to impose higher electricity fees on domestic users as “steaming coal prices have exceeded power plants’ cost.”

    Although electricity companies have boosted the use of renewable energy, thermal power still accounts for the bulk of output.

    Although thermal power overall contributes 75 percent to electricity generation, the level is as high as 90 percent in the north, which is frequently clouded by heavy smog and haze.

    China’s efforts to change

    Hasn’t China taken efforts to correct such problem?

    Yes, given the output of wind, solar, and nuclear energy has continuously surged. But the effects haven’t met expectations.

    To capitalize on the rise in production, the central government says improving the transmission and distribution network is pivotal to increasing consumption. The “leakage” of energy is making new energy producers hesitant, despite government subsidies. The National Energy Administration says an average 19 percent of wind energy, for example, wasted in transmission because distribution channels haven’t reached enough areas in need of power.

    Even if “dirty” coal is becoming somewhat of a pariah as nations around the world move increasingly to renewable energy, it remains indispensable as it is relatively cheap and easier to use.

    China will invest another 2.5 trillion yuan by 2020 to boost renewable energy generation, however, “most energy companies still rely heavily on thermal power given its cheaper running costs,” Liang Dunshi, deputy secretary at the China Coal Transportation and Distribution Association, said.

    Li Junsong, research director at China Securities, said with consumption remaining high, there would even be a supply shortage of 200 million tons this year due to the capacity cut.

    Paradoxically, China allowed “suitable” expansions of coal plants’ production.

    The development commission ordered major coal groups such as Shenhua to sign long-term contracts with electricity companies to ensure constant supplies to power plants at stable prices.

    The government has also acted to help the coal-reliant heating industry, troubled by a shortage of supply.

    Supplies were hit in October and November when the railways did not provide enough capacity to transport coal from south to north China for heating.

    “Although in the long term, coal use in China is set to decline, at present it still dominates the nation’s industrial consumption,” Liang said.

    Apart from long-term contracts to curb the price surge and deal with the supply shortage, the development commission said the maximum working period for coal plants should be increased to 330 days a year from the 276 days per year that had been set at the beginning of 2016 to cut capacity.

    Collateral damage

    Worse cases even emerged in the steel industry. It is another industrial raw material that has been beset by over-production, which China set out to correct along with coal in its supply-side reform: its top measure implemented throughout last year to reduce outdated and low-efficient capacity and foster new growth-drivers.

    That cut output by 45 million tons by October, but the slack has been taken up elsewhere in the industry.

    And the essence of the reform has been somewhat countered, with illegal production in provincial areas such as Jiangsu and Hebei was reported last month.

    “The real situation is questionable,” Jiang Mingde, the economist at Hengtai Futures, said. Surging coal has also pushed the growth of steel prices, “injecting incentives to producers” to increase output.

    The National Bureau of Statistics said crude steel production kept growing over the first 10 months, albeit capacity has been cut among poorly operated plants.

    This added more uncertainty over whether coal capacity can be curbed as the rebounding steel sector feeds demand for coal, a major raw material in steel production.

    The supply-side reform will continue, as pledged by the development commission, as a glut still exists in the coal and steel industries. It meanwhile emphasized “more efforts would be added to urge the cut in steel production.”

    “That would do good in helping cool coal at the root,” Jiang said. Under such guidance, the Bohai coal index has already dipped 2 percent since the November peak.

    “But the cooling would also be a long journey, given the industrial structure is changing slowly,” Jiang said. “Anyway, hopefully with the policies’ help we can expect a calmer 2017.”

    To share the micro-blog:
    vanitec.jpg
     
    NO.26 Building, An zhenli 3th Area, Chao Yang District, Beijing. Postcode: 100029
    Tel: 86-10-64441860 Fax: 86-10-64410636 Email: csteelnews@126.com
    www.adamspeakhotels.com. All Rights Reserved.
     
    ,欲乱好爽舒服,中文字幕熟女人妻一区二区,yw193.can尤物网站,男女配种超爽免费视频,男女性高爱潮是免费国产,人与人性恔配视频免费