Chinese Thermal Coal Market Faces Coronavirus Squeeze

Noble Resources’ chief coal analyst Rodrigo Echeverri said that China’s domestic thermal coal market faces a 2-3 month short squeeze as a rapidly spreading coronavirus outbreak curtails production more than demand, He said “Supply has been hampered in the short-term even more than demand. This has created a short-squeeze in the market, which is likely to last 2-3 months. China city air quality indices, which increase when industrial production picks up, and migration data show that very few workers have returned to work after an extended Lunar New Year holiday. China is not producing right now.” He expects Chinese demand for thermal coal to fall by about 180 million tonnes due to the disease, outpaced by a loss of about 200 million tonnes of production.