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Positive outlook for metallurgical coal in Chinese province

World Coal,

Celsius Coal Ltd has completed its first phase Xinjiang coal market study, with the assistance of independent consultants, Bryanston Resources. The study analysed in excess of 20 coal customers in the Xinjiang province, which lies on the border of the Kyrgyz Republic. The market study also involved direct visits to selected key target customers for discussions on coal usage and logistics.

Celsius completes first phase Xinjiang coking coal market study:

In completing the study, Celsius found that there was a large demand and supply ‘gap’ for met coal in Xinjiang. According to Celsius, this gap is set to continue widening.

Current prices for premium met coals in Xinjiang are higher than seaborne prices. Independent experts have forecast the Xinjiang price of premium hard met coal will rise from US$ 145 per tonne to US$ 235 per tonne by 2017.

Celsius has suggested that the positive market dynamic in Xinjiang has been caused by rapid growth in the province’s blast furnace steel making capacity and lack of adequate local resources of met coal.

Executive Chairman of Celsius, Alexander Molyneux, said: “The study confirms our understanding that a significant supply gap for premium metallurgical coals exists in the region, leading to the potential for a far more positive market dynamic in Xinjiang than the current outlook for seaborne metallurgical coals”.

Technical and operations director, Alistair Muir, added “The information we have gained is a valuable piece in our overall market analysis review and can be used to help optimise our mine planning studies.”

Celsius owns a development stage coal resource in the Kyrgyz Republic. Here, project studies are progressing, with a view to assessing road and rail production scenarios into the neighbouring Xinjiang market. Celsius is therefore well positioned to capitalise on any opportunities that might arise in the Xinjiang market.

Adapted from press release by Samuel Dodson.

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