Shaanxi Daily Headline: Supply-side structural reform is markedly promoted by the forced market

Shaanxi coal inventory reached historic lowest point

Report from our correspondent (Reporter Guo Xiaobin Cheng Jingfeng Correspondent Sun Peng) Until June 12nd, the coal inventory of Shaanmei Group was only 550 thousand tons. According to Group Chairman Yang Zhaoqian, it is the historic lowest point in coal inventory of the Group. Moreover, the current inventory mainly distributes in the old mining of Guanzhong, and the inventory of high quality coal mine in Binchang, Huangling and northern Shaanxi areas is almost zero. Data from provincial coal authority shows that the province's coal productivity was  156.9737 million tons in total from January to May, and reduced by 15.2283 million tons; At the end of May, the coal inventory of the provincial state-owned key mines was 781500 tons, and down 68.13%.

  Contrary to the decreased inventory: the coal price rose in a restorative way. In mid-April, the coking coal price led the overall rise of the coal price, the price of some high-quality coking coal and cleaned coal rose 100 yuan per ton, and that of the chemical coal and steam coal in the northern Shaanxi rose 10 to 30 yuan per ton. In May, the province's coal sales arrived at 35.543 million tons, an increase of 10.5209 million tons, and up 42.05%.

   Since 2012, affected by the economic slowdown, energy restructuring and other factors, the steel and coal industry has generally declined. As one of the large-scale coal enterprises that earliest implemented to halt productivity, close mines, and postpone new coal projects, Shaanmei Group from the beginning of 2013has proposed the structural adjustments implementation about productivity exit considering the high cost, low quality, and noncompeting mine in the old area of Weibei, closed its eight hopeless subordinate mines in 2014, and orderly conducted the surplus personnel placement, which played a good demonstration effect for the supply-side structural reform of the overcapacity industry.

   On January 4th this year, Shaanmei Group participated in the forum about dissolving excess steel as well as coal productivity and erasing poverty, and Premier Li Keqiang chaired it in Taiyuan and introduced the reform experience.

    Our country has more coal, less oil, and scarce gas, the high proportion 79% of coal in the energy consumption structure determines its firm based energy status. Shaanxi coal reserves reach more than 170 billion tons, and high-quality steam coal reserves rank first in the country. On January 22nd this year, the State Council lay out again de-capacity in coal industry, which on one hand guides enterprises to take the initiative to exit productivity, and substantially compress productivity; and on the other hand strictly controls new productivity. As first one coal enterprise of the top 500 in Chinese western, Shaanmei Group has been going to close 18 coal mines, postpone 4 coal projects, and exit 30 million tons backward productivity, which involves more than 40 thousand employees. At the same time, a long-term mechanism of surplus staff shunt placement was established.

With the promotion of the national de-capacity policy, the coal market has been affected markedly. He Xin, the deputy general manager of Shaanmei Transportation and Marketing Group told reporters that the forced market makes backward productivity gradually exit. This round coal price rising is the restorative rising after the early irrational fall. On one hand it is driven by the recent rebound of the domestic real estate industry; on the other hand, due to the summer electricity using peak, the power plant is in the coal storage period, which promotes some coal demand. According to the provincial coal authority, the stable rising trend of the province steam coal price will continue.