Reuters reports that coking coal prices in Shanxi province, China's top producing area, are continuing to surge as small mines are being shut in a safety campaign ahead of the Olympic Games, while strong steel production has kept demand brisk.
Traders and industry officials said prices of prime coking coal rose by 15% in the past few days to CNY 1,500 per tonne in parts of Shanxi. Prices were CNY 800 to 900 per tonne at the beginning of the year.
A trader in the province said coking coal supply is extremely tight, adding that prices in the Luliang region which produces high quality coking coal have risen by two thirds this year. He added that "buyers have to pay cash up front to get shipments."
Mr Lu Ping, an analyst with China Merchants Securities, said "The government will enact tougher measures for small coking coal mines, which will further tighten supplies. There is no solution to ease the coking coal shortage as far as we can see, so prices will continue to climb."
Source: Steel Guru
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