Already a Bloomberg.com user?
Sign in with the same account.
Yanzhou Coal Mining Co Ltd
Yanzhou Coal Mining Co. (YZC), 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 demand will start to pick up toward the end of the third quarter,” Weimin Li, chairman of Shandong-based Yanzhou, said today in Sydney. “From late September, you will see support for prices.”
China’s government is cutting interest rates to boost slowing growth. The central city of Changsha, capital of Hunan province, yesterday 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 U.S., where lower gas prices have prompted substitution.
“Internationally, the trend is very similar,” Li said, using a translator. “We’re hitting the bottom, and we’re waiting for the market to pick up.”
Yanzhou (1171) rose as much as 2.5 percent to HK$11.32 and traded at HK$11.26 as of 11:08 a.m. in Hong Kong. The shares have declined 32 percent this year, compared with a 4.4 percent gain in the benchmark Hang Seng index.
Li, speaking at an investor briefing for Yanzhou-controlled Yancoal Australia Ltd. (YAL), 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.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at email@example.com
To contact the editor responsible for this story: Rebecca Keenan at firstname.lastname@example.org