The first half of this year will be the most difficult period for the coal industry

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The first half of this year will be the most difficult period for the coal industry. -------------------------------------------------------------------------------- February 5, 2009 　　　“The price of coke is returning to more rational levels; it dropped to 1,100 yuan per ton last October, and now it has risen to between 1,600 and 1,700 yuan per ton – this is a sign that the market is recovering.” ”Recently, Zhang Wenxue, a representative of Hebei Province, chairman and party secretary of Kailuan Group Co., Ltd., said in an interview with a reporter from China Economic Times that although the effects of macro-control measures and policies aimed at boosting domestic demand are beginning to show, a significant recovery in the energy market has not yet occurred. The impact of the financial crisis is still far from subsiding, and the first half of 2009 will be the most difficult period for the coal industry. 　　Zhang Wenxue said that the financial crisis had a significant impact on the domestic coal industry. First, the market has shrunk, products are unsold, and some mines have ceased operations, including those in Shandong, Anhui, and other regions ； Second is the increase in inventory levels. Last November, coal plant inventories increased significantly; Kailuan’s inventory rose sharply from 250,000 tons and 300,000 tons to 500,000 tons ； Third is the decline in prices. Among them, the price of coal used for smelting has dropped by about 40%; it was as high as 2,000 yuan last year, but now it is 1,050 yuan. As for the price of thermal coal, it has not yet been determined due to disagreements between coal companies and power companies ； Fourth, the difficulty in recovering payment for goods has severely affected the normal economic operations of coal enterprises. Currently, the steel industry has excessive inventory of raw materials and faces difficulties in capital turnover. Regarding the recovery of debts owed by Kailuan, the amount was 400 million yuan before August last year; it rose to 1.5 billion yuan after September, and at its peak it exceeded 2 billion yuan. 　　“There are now signs of a recovery in the market,” said Zhang Wenxue. At present, the coal inventory at the Qinhuangdao port has decreased significantly; in early December last year, the inventory was nearly 10 million tons, but it has now dropped to around 6 million tons. The reasons for this are, firstly, market adjustments, and secondly, a decline in the production capacity of the entire coal industry. 　　But it’s still hard to say whether the market can recover significantly at present. I think the entire crisis has not yet reached its bottom, and some problems have not come to light. ”Zhang Wenxue said, \"At present, the power industry is not operating at full capacity, and there is a risk of an oversupply in the coal industry. However, the possibility of further declines is not high; there won’t be sharp drops of 30% or 40%, otherwise the coal industry will suffer massive losses.\" ”