Aluminum price soars as China cancels tax incentive on exports
Futures in London jumped as much as 8.5%.
Power station coal prices at China’s largest coal port have not been this low since July 2009 – an indication that the Chinese economy may be slowing as as the country’s industrial sites decrease demand.
Prices at the Qinhuangdao shipping port dropped to about $91.34 per metric ton, Bloomberg reports.
On Friday Chinese domestic coal prices went from 583 yuan per tonne to 578 yuan ($94.20), according to Reuters.
Meanwhile, the country’s coal miners reduced output by 3.7% in the first half of 2013.
As the world’s largest coal consumer and producer, Chinese economic data weighs heavily on the global coal market but domestic suppliers are also feeling the pinch.
Reuters estimates that up to 26 major coal companies in the People’s Republic are losing money and six are now in the red with many clients unable to meet payments. Thermal coal can cost anywhere between $80 to $100 to produce in China, depending on how far inland the miner is located.
Rising labour costs and high transportation fees are making domestic coal less competitive at home; Chinese coal imports have grown by 13.3% during the first half of 2013 and Indonesia, Australia and South Africa are all major suppliers.
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