"Now prices, coal production has been not to make money, a lot of coal prices have been stopped, the part is cut. Shuozhou City, Shanxi one coal enterprise boss said there are two annual output of 120 million tons The coal mine is in the foundation for early construction phase. At this point, he is waiting to see the price of coal.


Cut production loss


In August, the part of the coal enterprises in Shanxi, Inner Mongolia has been suspended, the majority of coal prices began to cut.


Briquette enterprises gathered in the coal mine in Shaanxi Province, Zhao Zizhong (a pseudonym) is responsible for an annual production capacity of 1.5 million tons in production, production continues, only reduce production time, workers holiday turns.


Large and medium-sized coal mine production cuts have to choose the way. Hu Dawei told reporters, in order to maintain long-term cooperation of large customers, even losses, coal mines must also maintain the production and supply.


And maintain the operator can maintain the most pressing business cash flow. Trading at a loss in coal enterprises can still return of part of the funds, the burden of day-to-day operations of the coal mines. Thus, "would rather lose money production choice under accumulation of coal mine more and more, when the long-term digestion does not go out, the coal spontaneous combustion or deterioration. Coal prices have been down, coal storage much more serious enterprise fund losses.


Downtime is the worst. Business owners have more than one coal mine project in Shanxi, Ordos, Xinjiang, said Zhang Li (pseudonym), stop production losses caused by more serious. "The equipment of invested billion, if not production, in wet underground unventilated space is very prone to corrosion and other corrupted, maintenance costs on a very, very big." And he said, "coal mine after a work stoppage, workers To leave, after the coal mine is hard to find skilled first-line mining staff. "


Rising coal prices, coal is considered a lucrative industry, when coal prices fell sharply, coal prices will fast from surplus to deficit.


As a resource-based products, the profits of the coal enterprises mainly from the scale. The a coal prices bosses steam coal 5500 kcal for example, by the end of 2011 thermal coal per tonne terminal market price of 700 yuan, in fact, to remove the cost of mining costs, transportation costs, as well as RBI relations, leaving the coal business owners profit more than ten dollars per ton.


Last year, coal prices soaring, and maintain the price level in more than $ 700. An annual output of 200 tons of coal a year profit is two or three thousand million.


For the benefits of this year, Zhang said, the goal is to "profit last year to make up for a loss this year."


Economic downturn microcosm


According to the data of the listed companies of China Coal Economic Research Institute of Coal Research Center, in the first half of this year, 38 listed companies in a total profit of 735 billion yuan, a year-on-year decline of 2.5%, or less than the full A and B shares 1.8 percent. SFC Sector 38 coal listed companies in this context net profit fell 15.9%, the average gross margin decreased by 6%.


In the first half of this year, Chinas economy a year-on-year increase of 7.8%, growth is slowing, decline in market demand of coal, power plants, steel mills, coal consumption decreased. In July, the national coal sales of 2.95 million tons, down 2.7%.


2012 the first seven months, the oversupply of coal is still obvious. 1-7 months of this year, the national coal production totaled 2.25 billion tons, a year-on-year growth of 5.5% over the same period, the national coal sales totaled 21.5 million tons, a year-on-year growth of 4.9%. Over the same period, inventories increased by 100 million tons.


Price has been steadily rising the last decade is known as the "golden years" of the coal. From 2006, with the eventual elimination of tariffs on Chinas coal down to, plus international coal prices fell as well as reduce the cost of international ocean transportation of bulk commodities, international coal into the domestic price domestic coal price is almost the same, and some even low from the domestic purchase price.


Publicly available data according to the government, in 2011, Chinas net imports of coal 168 million tons, an increase of 15.2%, the expansion of the scale of imports increased coal inventory.


Coal prices can fall further?


The face of the growth in coal demand to fall, the decline in the price of coal, the oversupply situation, the China Coal Industry Association convened a discussion of the countrys 14 large coal enterprises require stable coal prices to maintain steady economic development of coal.


On August 31, the China Coal Industry Association issued a written proposal, put forward five measures. The main contents include: balance supply and demand, the scientific organization of production to promote corporate organization of production according to market demand; reasonable control of the total coal production, and strive to maintain the stability of the coal market; advocate enterprises to strengthen self-discipline, and is not illegal construction, not illegal production, not ultra-capacity production; encourage enterprises to eliminate backward production capacity, promote the transformation and upgrading of enterprises, enhance the scale and level of modernization of the coal mine production.


To alleviate the pressure of the coal enterprises, some local government bailout. From July 1, Guizhou Province execution of wet or tariff policy. Reduce production costs through price subsidies and wet period tariffs dropped substantially improve the operating rate to increase electricity consumption, stimulating demand for coal; increase from west to east power increase coal sales; addition, the government began a comprehensive clean-up involved in gas charges reduce the cost of coal production.


From August 1 until October 31, the Henan provincial government also began coal production enterprises suspend temporarily the provincial price regulation fund.


But for coal enterprises, Zhang said, the biggest problem in the market. Almost all the coal bosses, the only hope for the future, the economic situation has improved, the pick-up in coal prices.


August 22, Wang Qi, vice president of the China Iron and Steel Association, said that in listening to the coal market in 1-7 months running and major large-scale iron and steel enterprises in coal procurement reporting, there is room to decline of the price of coal.


According to media analysts, the prices of steel products on the market has dropped from 1000 to 1100, while iron ore prices fell less than 300 yuan, if steel prices continue to fall, the price of coal is likely to fall further.