According to Xinhua, China State Railway Group has started maintenance on a key coal transport line in northern China to ensure stable deliveries during the winter, effectively limiting transport volumes to one million tonnes between 4 October and 28 October. Industry sources states that the rail line delivered more than 100m tonnes of coal between July and September to meet peak summer demand.

In our view, volume shortfall should be limited but would ensure incremental seaborne coal cargoes – which on a tonne-mile basis would be amplified by current congestion in Chinese ports. The situation adds to the fact that both China and India are struggling with menacingly low coal stocks headed into the winter.