By Jeffrey Landsberg
As we discussed in a special client update yesterday, two new coal mine accidents and deaths occurred in China over the weekend. While extremely tragic, accidents and deaths are continuing to ensure the prioritization of safety, inspections, and restrictions over coal production growth. This remains helpful for the dry bulk market and coal import market as China's coal-derived electricity generation remains very likely to continue to far outpace domestic coal production.
New today, and not surprising, is that the National Mine Safety Supervision Bureau issued an urgent notice on further strengthening the prevention of accidents. While the notice included typical warnings and urged companies to learn from accidents and practice better safety controls, also noteworthy to us is that the notice reportedly requires a designation at all companies naming the first person responsible for the company's anti-accident work. Ideally, mining companies (and key executives in charge and designated responsible) will become better at ensuring that accidents do not occur.
Also of note is more unannounced checks on coal mining companies are already reportedly being carried out. In addition, some import restrictions are reportedly being temporarily lifted at various provinces to help ensure coal demand can be met this summer. As we discussed again in Commodore Research's most recent Weekly Dry Bulk Report, electricity consumption records have continued to be set in various provinces in China and summer has not yet even begun. Guangdong province remains only the latest province to have reported an all-time high in its daily electricity consumption, and the demand outlook for all of China remains very encouraging to us. Overall, we remain of our view that China's coal imports will find strength this summer