China's coal machinery manufacturers are expected to continue their strong run till 2020, buoyed by a recovering coal mining sector, analysts said.
Wu Dongdong, an analyst with Hangzhou-based Zheshang Securities Co, said demand for coal machines increased as a majority of coal enterprises earned higher profits.
"As the effect of supply-side reform unfolded, coal prices started to rebound by the end of 2016, and coal companies' profitability improved significantly," Wu said. "Outdated machines in need of replacement are also driving demand in the coal machinery industry."
Coal equipment includes longwall machines, continuous miners, draglines and highwall miners.
Several major Chinese coal machinery makers and suppliers predicted robust growth in 2017.
Zhengzhou Coal Mining Machinery (Group) Co estimated that its net income would increase at least 329 percent year-on-year to 266 million yuan ($41.9 million) in 2017. The company attributed the growth partly to the recovery of the coal mining sector.
Linzhou Heavy Machinery Group Co said it turned a profit last year, with estimated net income of at least 30 million yuan.
Tiandi Science & Technology Co, according to research data, expects a total of more than 20 billion worth of new purchase orders in 2017, nearly double the amount of the previous year.
(Writing by Jessie Jia Editing by Harry Huo)
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