The level of the inventory in China’s coal mining industry reached a record high in the first half of 2014 in spite of measures to reduce the price and to restructure production. Seventy percent of these companies are in the red.
Recently, the largest 14 coal mining companies agreed on four measures. They agreed that, for the second half of 2014, they would reduce the output of their production by 10 percent; they would reduce the June level of their inventory by 50 percent; they would regulate and standardize coal imports and they would establish a self-regulatory mechanism within the coal mining industry.
According to the statistics that the China Coal Industry Association released on July 12, 2014, as of the end of June 2014, China’s coal inventory had reached 99 million metric tons. Nine provinces had experienced industry wide losses in coal mining. Twenty out of 36 of the largest coal mining companies are in the red. Nine of those are on the brink of bankruptcy. Seventy percent of the coal mining companies in China are in the red.
Sources:
Securities Daily reprinted by People’s Daily, July 29, 2014 http://energy.people.com.cn/n/2014/0729/c71661-25361362.html
Economic Information Daily, July 28, 2014
http://news.xinhuanet.com/fortune/2014-07/28/c_126803768.htm