Chinese coking coal mines delay restart on virus fears

Major coking coal mining firms in Shanxi province, China's largest coking coal-producing region, have pushed back the restart of mining operations by another week to 9 February to assess the extent of a viral outbreak.

The measures are aimed at curbing the rapid spread of the coronavirus, especially since many workers will be travelling around the country to get back to work after the lunar new year festivities.

Some coal mines in neighbouring Shaanxi province have also been disallowed from resuming coal mining operations, while stricter checks on the body temperature of drivers transporting coal from Inner Mongolia may further hamper coal deliveries.

Most Chinese provinces, including Guangdong, Jiangxi, Hebei, Shandong, Chongqing and Yunnan, have mandated similar rules for operations at various enterprises to be resumed only after 9 February, although there may be exceptions for individual companies.

Coking coal market participants expect the delayed coal mining restarts to limit domestic coking coal supply, which is likely to prop up demand for imports and boost seaborne prices globally.

But steel mills in the country are also expected to be hit by delayed restarts because of the coronavirus outbreak, which may then curb demand for coking coal and other steelmaking raw materials.

"The actual impact of the coronavirus on the coking coal market still remains unclear and a lot of it will depend on how badly production is affected at steel mills, relative to the disruption to production at coal mines," a Singapore-based trader said.

By Rou Urn Lee