Yanzhou Coal sees price gain in late Sept
Updated: 2012-07-28 07:38
By Bloomberg(HK Edition)
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Yanzhou Coal Mining Co, China's fourth-largest producer of the fuel, said the nation's recovering economy will boost demand and the price of thermal coal from late September.
"The economy in China is strengthening, so the expectation is (that) demand will start to pick up towards the end of the third quarter," Weimin Li, chairman of Shandong-based Yanzhou, said on Friday in Sydney. "From late September, you will see support for prices."
The central government is cutting interest rates to boost slowing growth. The central city of Changsha, capital of Hunan province, on Thursday introduced an 829.2 billion yuan ($130 billion) investment plan to shore up growth.
Prices for thermal coal, used in power generation, have slumped because of waning demand and increased exports from the US, where lower gas prices have prompted substitution.
"Internationally, the trend is very similar," Li said, speaking through a translator. "We're hitting the bottom, and we're waiting for the market to pick up."
Yanzhou shares have declined 32 percent this year, compared with a 4.4 percent gain in the benchmark Hang Seng index, dragged by the slump in coal prices.
Li, speaking at an investor briefing for Yanzhou-controlled Yancoal Australia Ltd, listed on the Australian stock exchange, also said the company is in early talks with commodity trader Noble Group Ltd to co-operate on global sales and marketing. Noble owns a 13 percent stake in Yancoal.
Benchmark Newcastle Coal Futures have declined 20 percent this year, putting coal producers under pressure. Rio Tinto Group, the world's third-biggest mining company, said this month it is shedding jobs at one of its thermal coal mines in Australia to cut costs.
(HK Edition 07/28/2012 page2)