2018 PREVIEW: Chinese government policy’s sway on coking coal market is here to stay

Chinese government policies, especially those limiting pollution, will continue to be a factor affecting coking coal prices in 2018.

In 2017, China’s crackdown on pollution-causing heavy industries, including steel making, saw buyers of both domestic coking coal and seaborne cargoes adjusting their procurement policies.
Environment-friendly decisions
Chinese policy was a major influence on steel prices and margins in 2017 and the expectations among market participants is that there is no reason for the government to lower the bar on environmental standards.
This commitment was demonstrated most recently on Tuesday December 19 when China released plans to start a market to trade credits for the right to emit greenhouse gases.
While the initiative is expected to incentivize clean production from the major emitter – the power sector – it also underlines the country’s emphasis on evolving to an environmentally-conscious economy.

Expectations of the commitment stretching into 2018 also arise from goals set in the five-year plan announced in late 2016, which include...

Published

Deepali Sharma

Sophie Zhao

January 04, 2018

03:00 GMT

Singapore