Wu Yulu: Market disorder is the biggest concern in the marketization of coal

Coal is the main energy source in China. The healthy development of the coal industry is of vital importance to the healthy development of the national economy. As the person in charge of the coal industry, Wu Yulu, chairman of Yima Coal Industry Group Co., Ltd., believes that the coal industry What kind of problems exist at present? As a representative of the National People's Congress, what good advice does he have for the healthy development of the coal industry? Wu Yulu said: "My advice to the coal industry is to timely launch thermal coal futures to stabilize the market order."

Reporter: Can you feel from your suggestions that you are worried about the coal market order?

Wu Yulu: It is the heavy responsibility of the coal industry to stabilize the coal market and ensure coal supply. From the perspective of the general trend, coal's gold has passed 10 years, and in the next 10 years, it will have to face the adjustment of the transition period. Since 2012, the operation of the coal industry has been very difficult. Coal prices have dropped by 10% to 20%. The accumulation of coal and the squeeze of profit margins have had a greater impact on the coal industry. This aspect is a factor in the economic cycle itself. The macroeconomic trend is slowing. At this time, coal production capacity has been released on a centralized basis. On the other hand, problems accumulated over the years, such as the unreasonable industrial structure, have also been exposed. In this way, the cyclical factors and industrial structure factors are superimposed on each other, resulting in a temporary surplus in the coal industry. In the face of this situation, the country actively responded and in early 2013, the price of thermal coal was completely market-oriented.

Reporter: The debate on the marketization of coal has been going on for many years. This year, the country finally decided that you think whether the marketization of thermal coal is appropriate at this time and what kind of far-reaching impact will the marketization of thermal coal have?

Wu Yulu: The marketization of thermal coal is an active policy to deepen reforms. The sooner it is implemented, the better it will be for the development of the coal industry and the better it will be for the country. However, we cannot simply assume that as long as the price of coal is fully liberalized, the so-called marketization of coal is realized. In a huge economy like China, nearly 50 percent of the world's production and consumer coal will have such problems, such as disorderly regional competition, if the market mechanism is not yet sound. According to the current elasticity coefficient of about 0.5, according to the national strategy of doubling the GDP by 2020, the consumption of coal will reach 5 billion tons at that time. I am concerned that many companies will withdraw from the market under sustained injury, affecting 2020 Before and after the coal supply.

Reporter: You are saying that the disorder of the market is the biggest concern for the marketization of thermal coal, and this serious disorder will even affect the effective supply of coal around 2020. So, what are your good suggestions?

Wu Yulu: My specific proposal is to introduce thermal coal futures as soon as possible. It is right to achieve marketization, but at the same time, we must introduce corresponding policies, establish market rules, and improve market mechanisms. Thermal coal futures is one aspect of improving the market mechanism. Of course, it is also a crucial aspect. Thermal coal futures can play an early warning and leading role in the market and is an effective means to stabilize the coal market.

Reporter: Some information indicates that the international supply capacity of coal has slowed down in 2013, which may affect China's coal import volume. What do you think about the economic trend in 2013 and what kind of strategy will the Yeemei Coal Group adopt?

Wu Yulu: I am optimistic about the economic situation in 2013. I think it will be better than at least 2012. The overall situation of coal is also very promising.

Reporter: Some senior executives of coal companies have different views. It is understood that some coal companies have implemented a comprehensive tightening policy. This may be another kind of judgment on the future prospects.

Wu Yulu: If the GDP is lower than 7.5%, the days of the coal companies will be very difficult; if the GDP is kept at 8%, it will be relatively difficult; if the GDP reaches 8.6%, the days of the coal companies will be very good. At the beginning of 2013, the macro-economy showed obvious signs of recovery. Combined with the full-scale marketization of thermal coal, coal companies will show marked improvement. Moreover, the difficulties of coal companies are temporary. In the long run, the status of coal as the main energy source will not be shaken in the next 30 years.

Reporter: In the process of enterprise development, what good advice do you have for your coal counterparts?

Wu Yulu: I just have some superficial understanding. The experience of Yiyi Coal may not be suitable for other companies. Coal companies generally face the problem that they must change their development mode and achieve leapfrog development. When coal companies want to transform, they must choose the right time. It is best to choose the rising period of the company, not the recession period. Otherwise, there will be great risks. Moreover, if you want to learn to give up, there is something you can afford, and you cannot bear anything, you may have problems.

Reporter: The state has recently introduced a number of policies to encourage the development of distributed energy. It is expected that distributed energy will occupy a very important position in the next 10 years. As a traditional coal company, is there any plan to develop in this area?

Wu Yulu: We will consider demonstrating combustible ice and shale gas. From the perspective of future trends in the energy sector, we have stockpiled Yankuang and are preparing to invest accordingly to cope with the advent of the electric car era.