Furthermore, according to UBS Group AG, coal prices are expected to hold gains near the highest levels in five years as China’s drive to curb overcapacity sustains import demand, Steel Guru reports.

“We think China will continue to close capacity through 2018 and into 2019,” UBS Group AG analyst Lachlan Shaw told Steel Guru, adding that “it has already driven better demand for seaborne thermal coal. The Chinese have made good progress but they still have maybe a third, to a half to go in terms of the capacity closure targets.”

The overall global supply outlook also looks less promising. New thermal coal mines are not in the works and projects are growing more difficult to finance as banks and investors are concerned over environmental issues, further tightening the market and driving up prices.

“Supply is still very tight, probably not going to catch up with demand easily in January and February,” Shirley Zhang, principal analyst at Wood Mackenzie, told the Financial Times.

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