According to the 2018 Annual Report on China's Coal Industry Development recently released by the China National Coal Association, coal consumption in 2019 is projected to remain largely stable with limited incremental demand**. However, accelerated domestic coal capacity expansion, enhanced rail transport capabilities for coal, and further increases in supply capacity will gradually shift the national coal market toward a more balanced supply-demand situation.
In 2019, coal prices will remain largely stable with no significant downward adjustment room," stated Yang Xianfeng, Chairman of the China Coal Transportation and Distribution Association, at a press conference. He emphasized that advances in capacity reduction, structural inventory shifts, and increased adoption of medium-to-long-term contracts would substantially curb price volatility, predicting "far milder fluctuations than in previous years."The Report indicates that in 2018, China's coal consumption grew modestly by 1.0% year-on-year. Jiang Zhimin, Vice Chairman of the China National Coal Association, noted that "coal demand will plateau at high levels." On the supply side, national raw coal output reached 3.68 billion tons, up 4.5%, while net imports surged to 276 million tons (+5.2%)—the highest in four years .
The Report indicates that current coal production capacity remains substantial, yet structural issues persist prominently. Relative overcapacity in the overall coal sector will become a long-term norm. Notably, the proportion of medium-to-long-term coal contracts further increased in 2019. Yang Xianfeng stated that according to observations by the China National Coal Association over the past two years, some large coal enterprises have achieved medium-to-long-term contract coverage rates of 90%-100%.
Jiang Zhimin highlighted that the coal industry's reform and development still face deep-seated contradictions and challenges: the persistent trend of nationwide coal overcapacity remains unchanged, the foundation for supply-demand balance remains fragile, and imbalanced/inadequate development is acute. Productivity levels require further enhancement, while difficulties persist in capacity reduction, separation of social functions (e.g., water, power, heating supply, and property management), brain drain, and recruitment challenges for frontline mining positions
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