As a typical coal industry excess capacity, after 2002-2012 years after the golden period of ten years, 2013-2015 years, accompanied by the macroeconomic downturn, shrinking downstream demand and overcapacity, coal prices appear cliff downwards, industry loss continues to expand. At the end of 2015, coal prices dropped to the lowest level in history, for 371 yuan / ton, the average price decline of nearly 30% in 2015.

In 2016 to promote the yield limit of capacity to policy, coal prices rise rapidly in the low base. At the end of December 2016, Bohai thermal coal price of 593 yuan / ton, an increase of 59.4%, although the increase is large, but the absolute price level is not high, and at the end of 2013. “Since the middle of 12th Five-Year”, steel prices continued to decline, by the end of 2015, Lange steel comprehensive price of 2120 yuan / ton, fell to historic lows. In 2016 to the production capacity and demand growth, steel prices rebounded, the end of December 2016 3720 yuan / ton, while steel prices in 2016 rose significantly, but the absolute price level is not high, this high rate is based on the 2015 low base on the price level and the current is 2014.

“Since the middle of 12th Five-Year”, steel prices continued to fall. At the end of 2015, Lange steel comprehensive price of 2120 yuan / ton, fell to historic lows. In 2016 to the production capacity and demand growth, steel prices rebound. At the end of December 2016 3720 yuan / ton. Although steel prices in 2016 rose significantly, but the absolute price level is not high, this high rate is based on the 2015 low base on the price level and the current is 2014.

Therefore, to sum up, the early coal and steel prices generally low, the coal and steel price rise is based on the low price on the basis of the recovery has obvious characteristics, the absolute level of prices is relatively moderate.

4 policy capacity to change the pattern of supply and demand is expected to increase the price

After the measures introduced in the administrative capacity to resume production, slow down and the policy is expected to intensify the supply side contraction. Since the start of 2016 led by the government administrative capacity to act, the actual capacity to achieve the targets of substantial impact on steel production is not large, the impact is mainly reflected in the expected or producers and investors. The market capacity to think has intensified, may supply will decrease, the price may rise.