SGX noted in its monthly dry freight report that Chinese coal demand had been one of the main surprises for the market in 2016.
“Looking forward, that same dark cloud of uncertainty is likely to linger over 2017,” the report said.
“Our latest industry survey revealed widespread expectations that China’s 276-day production restrictions will likely be resumed from the spring, with uncertainty over the impact on import demand as central policymakers adjust production and prices to their desired levels.”
Last April China limited its coal mines 276 days of annual production, however, this was lifted with the onset of winter and higher domestic demand.
SGX also noted that Indian coal import demand this year would also hinge on domestic production.
While Chinese iron stocks at ports have hit a record high this year thermal coal inventory has declined.
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