Mod­ern­iza­tion has paid off for the coal in­dus­try

China Daily (Hong Kong) - - BUSINESS -

fi­nan­cial per­for­mance, es­pe­cially those in cycli­cal in­dus­tries such as coal, iron and steel, and non­fer­rous met­als, said Zhan Sheng, in­vest­ment di­rec­tor of JZ In­vest­ment, a sub­sidiary of JZ Se­cu­ri­ties.

“The price is ex­pected to fall back in Au­gust and rise again un­til peak de­mand in the winter,” Bi said.

With the growth of debt­for-eq­uity swaps and the re­struc­tur­ing of coal com­pa­nies, their op­er­at­ing cost will be fur­ther re­duced. As a re­sult, Zhang pre­dicted coal com­pa­nies’ prof­its will con­tinue to grow in the sec­ond half.

Ef­forts to cut ex­ces­sive coal ca­pac­ity have prompted the healthy and sus­tain­able devel­op­ment of the sec­tor. In par­tic­u­lar, the busi­ness con­di­tions of coal com­pa­nies have im­proved, said Yan.

Yan also noted that the pol­icy of ca­pac­ity re­duc­tion will re­move the inf­fec­tive and in­ef­fi­cient ca­pac­ity with high costs and low com­pet­i­tive­ness, which will im­prove the over­all ef­fi­ciency of re­source al­lo­ca­tion and ca­pac­ity uti­liza­tion, and op­ti­mize the sec­tor’s in­dus­trial struc­ture and pro­duc­tion lay­out.

Ef­fec­tive coal ca­pac­ity in 2017 will be in­creased by around 200 mil­lion tons year-on-year, en­sur­ing the sup­ply of coal and elec­tric­ity, ac­cord­ing to a meet­ing held by the NDRC on Mon­day.

TIAN SHENG / FOR CHINA DAILY

A huge cargo ve­hi­cle un­loads coal at a large mine in Huaibei, An­hui prov­ince.

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