Over the past week, Chinese buyers have begun hoarding cargoes of thermal coal in the spot market ahead of potential action from Beijing to rationalize domestic supplies. The Chinese government recently ordered mines to cut capacity by 16% and operate for 276 days annual, compared to 330 days previously.
Moreover, the coal market is being bolstered by disrupted shipments from Indonesia and increased demand for high-grade thermal coal out out of South Korea and Taiwan.
“There are so many cuts coming through domestically that China’s consumers will probably need to engage the seaborne [or import]market,” Tom Price, analyst at Morgan Stanley, told the Financial Times.
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