This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Chinese Coal Sector Consolidates As Indian Coal Imports Surge

Chinese Coal Sector Consolidates as Indian Coal Imports Surge

The Chinese coal sector is maturing and growing sleeker through consolidation, according to a report  from Xinhua. At the end of 2012, the number of large coal-producing companies — those with revenues greater than 20 million yuan — shrank by nearly 20 percent, from 7,700 firms to 6,200.

This streamlining was reportedly driven by overcapacity. Data from the China National Coal Association shows that coal stockpiles held by producers nationwide leapt 58 percent during 2012; they now stand at 85 million metric tons (MT). China's production is up 4 percent on the year, to 3.66 billion MT, while prices at some locations in the nation have fallen as much as 27 percent, to 630 yuan ($100) per MT.

Coal companies globally are being held back by regulatory issues, according to the 2012 Mining Executive Insights survey recently released by IT-services provider Ventyx. Of the over 75 coal companies surveyed, 35 percent said that government approvals are the main constraint to the growth of their existing operations.

The second-most common response was customer demand — flagged by 21 percent of respondents — followed by available reserves at 18 percent. Only 11 percent of coal companies surveyed identified port or rail infrastructure as their main constraint.

Indian coal imports continue to surge on the back of flagging domestic production. Coal imports rose 45 percent year-on-year in December 2012, from 9.77 million MT to 14.2 million MT, according to data from Interocean Group. That includes 12.1 million MT of steam coal and 2.1 million MT of steel-making coal.

Growth efforts in India's domestic coal sector are finally starting to gain some traction, as Coal India (BSE:533278) — the world's largest coal mining company — accelerates production, according to reports from the company and the Indian government. The company is targeting an overall increase of 7 percent for this fiscal year and is aiming for further growth of 6 percent for the coming year. That will put this fiscal year's total at 492 million MT.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASDAQ 4,636.1050 -140.4030 -2.94%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs