Chinese coal market is expected to stay in a tight balance in 2021, with stronger demand driven by faster recovery of economic growth, said Zhang Hong, spokesman with China National Coal Association (CNCA), in 2021 national coal trade conference on December 1.
Compared to a relatively low base in this year, 2021 is likely to see resilient rebound of GDP if domestic prevention of COVID-19 pandemic is well performed, which could boost coal demand, Zhang noted.
Impacted by the coronavirus, China's coal demand in the first quarter was notably sluggish, and consumption in the first ten months was also dragged down.
The CNCA estimated domestic coal usage at 3.24 billion tonnes in January-October this year, dipping 0.8% year on year.
Currently, medium- and long-term contract coal accounts for more than 70% of China's total, which helps stabilize coal market to some extent, according to Zhang.
China is likely to see signing of medium- and long-term coal contracts increase to more than 1 billion tonnes in 2021, said Feng Yu, vice chairman of China Coal Transportation and Distribution Association.
The mechanism of "base price + floating price" will not change, with base price still at 535 yuan/t, he noted.
(Writing by Tammy Yang Editing by Alex Guo)
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