Rising prices lift shares of coal firms
Print Edition
COAL companies in China have seen their share prices surge in tandem with the rise in coal prices as a result of a cut in production of the commodity.
Coal prices in China have grown 12 percent in the past seven months.
Meanwhile, the coal industry index on the stock market has soared for seven consecutive trading days.
Yesterday, coal companies listed on the mainland rose by 0.32 percent on the whole, despite Shanghai’s benchmark index falling 0.47 percent and Shenzhen’s dropping 0.41 percent.
Since June 15, Yanzhou Coal Mining Co has jumped by 19.2 percent to 10.72 yuan, and China Shenhua Energy Co rose by 3 percent to 13.93 yuan.
For the first five months of this year, the supply of coal has shrunk by 8.4 percent year on year, equal to an output cut of 123 million tons, according to data released by the National Statistics Bureau this month.
The coal industry in China is fundamentally changing due to the Chinese supply-side reform to cut overcapacity, Fullgoal Fund Management Co said in a note yesterday.
“Prices are still expected to rise based on the reverse supply-demand situation,” the firm said.
Analysts are bullish about the long-term outlook on investment in coal companies as they are banking that China will continue to cut coal supply when alternative clean energy started being used more.
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