Coal deliveries from north to south China is seen to improve after the Haizetan transit station in the Haoji railway reopened after an upgrade. The Haizetan transit station lies in Jingbian county near Yulin city of Shaanxi province. Yulin city is the leading coal-producing area in Shaanxi. Production from the city increased 33% year-on-year to 145.5 million tons in January-April, according to the local statistics bureau.
China’s coal production is centred in its northern provinces of Inner Mongolia, Shanxi, and Shaanxi. The 1,814km Haoji railway is built to transport coal from these regions to landlocked areas in central and south China where they lack access to seaborne coal. The upgrade is expected to increase deliveries to Hunan and Hubei in central China as well as to Yunnan, Sichuan, and Guizhou in southwestern China.
Market participants expected the increasing deliveries to draw some coal away from northern ports and hence, support FOB prices for those ports. After the upgrade, the Haoji railway will compete for coal supplies with the Daqin railway which connects Shanxi province to Qinhuangdao in the north. The Daqin railway is currently under maintenance until around June 1.
