China's Premier Li Keqiang required to prevent inferior coal mines from reopening especially when coal prices are rising, a report posted on the central government's website showed on September 4.
"Low-grade coal capacity must be eliminated to make way for the advanced," Li said during his visit to Shigejie, a coal mine in Shanxi, one of major coal mining bases in the country.
Fenwei CCI Index assessed price of the spot 5,500 Kcal/kg NAR coal at 634.0 yuan/t ($99.9/t) on September 5, up 20.99% from a year ago. The price has been above 600-yuan/t mark since July 4, with the average of 629.70 yuan/t during the two months.
In 2016, Shanxi phased out outdated and surplus coal capacity of 23.25 million tonnes per annum (Mtpa), the largest cutbacks across the country.
China will continue to cut overcapacity of 150 Mtpa in coal sector and 50 Mtpa in steel sector this year, stated by Li in March's Government Work Report.
(Writing by Alex Guo Editing by Tammy Yang)
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