Government Intervention to Strengthen the Coal Industry in Progress

The year 2011 has passed. In the year, the domestic coal industry was complex and changeable, with reforms and progress, and setbacks and setbacks. The market pattern of supply and demand booming has not changed, and the overall increase in coal prices is strong. At the same time, the regional structure of coal supply has become increasingly prominent, coal-fired power is increasingly fierce, and the government's intervention in the coal market is also increasing. Overall, the coal market in 2011 was not calm.
Qiu Xizhe, a research fellow of China Investment Advisor Coal Industry Group, said that in 2011, domestic raw coal production was about 3.55 billion tons, which was an increase of 300 million tons from the same period of 2011, and the growth rate reached 8%. At the same time, due to the strong demand for coal, coal prices have also risen sharply, thermal coal prices have risen by 10%, and average increases in coking coal and coal injection have reached 20%. Increases in production and prices have effectively increased the operating profits of coal companies.
Although the domestic coal production in 2011 was relatively high, the contradiction between supply and demand was still serious, and the trend of coal production concentrated in the northwest region was very clear. While the bottleneck of transportation such as West-Coast East Transportation and South-Coal North Transportation has not yet been resolved, the structural tightness of coal in the coastal areas of East China continues to exist. This also led to an increase in the number of imported coal in the eastern provinces with coal shortages. In particular, as coal prices in China have remained high and international coal prices have been low, coal imports have further increased.
At the same time, in order to cope with the rapid growth in coal demand and ensure the stability of coal supply, the coal reserve mechanism has also officially entered the implementation phase in 2011. From the actual situation in China, due to the serious regional imbalances in coal production areas and coal consumption areas, coupled with the long-term tense state of coal transportation capacity, it is of great practical significance to establish a coal emergency reserve mechanism.
Zhang Yanlin, research director of China Investment Consulting Co., Ltd. pointed out that although the development of the coal industry in 2011 was affected by strong demand, the reform of the coal industry was not easy. In the resource tax reform, the collection of oil and gas resources has shifted from quantitative quota collection to ad valorem quotation. Coal alone has been excluded. In addition, the market-oriented reform of coal has also encountered certain setbacks. The coexistence of contract coal and market coal is difficult to change in the short term, and the NDRC's restrictions on coal prices are, to some extent, a regression of the coal marketization process.
The “2011-2015 China Coal Industry Investment Analysis and Prospect Forecast Report” released by China Investment Advisor shows that, from the long-term development trend, marketization is the inevitable road of the coal industry. At present, China's coal industry has achieved great achievements in development and also faces many problems. As the main force of China’s energy, the coal industry needs to seize opportunities, overcome difficulties, and achieve better results.

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