Oversupply of coal squeezing profits

[littlemissmartypants]

China is facing an oversupply of coal in 2012, as coal production is maintaining a high growth rate even though growth in consumption has declined and inventories are high, a top energy official said Thursday.

Increasing output, weakening demand, high stocks and falling prices are major problems for the country's coal industry, Wu Yin, deputy head of the National Energy Administration, said at a forum in Beijing.

Domestic coal consumption grew by 1.4 percent year-on-year in the first eight months of 2012, down from the 10.1 percent growth seen in the same period of 2011, according to Wu.

Wu attributed the consumption slowdown to several factors: increasing supply from hydropower plants, cheaper imported coal, and sluggish demand from energy-intensive industries like power generation and steel and cement manufacturing.

China's coal import volume grew by 46.3 percent year-on-year to 185 million tons in the January-August period of 2012. It is already more than the country's total coal import volume in 2011, customs data showed.

http://www.chinamining.org/News/2012-10-12/1350012490d59349.html

[eppur_se_muova]

1. When you're deep in a hole ... stop digging. nt