China coal imports to keep rising - Report

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2009

Reuters reported that the trend of rising coal imports in southern China is expected to continue as China's domestic coal production centers shift westward, increasing transportation costs. Mr Li Jinfeng researcher with the Industrial Economy and Technology Institute of Economic Research under the National Development and Reform Commission said that "But the momentum of imports earlier this year could not be sustained. It was the outcome of special factors. Although the surges in imports were partly due to price differences between domestic and overseas coal, the confrontation between leading power firms and coal miners played a role."
China's major power generating firms have not agreed with coal miners on the prices of term coal supply in 2009, but both sides took flexible measures to ensure shipments were not disrupted. Power firms also stepped up their overseas purchases to take advantage of the slump in costs of imported coal.
China's coal imports fell 15% from a month earlier to 11.77 million tonnes in August, but still more than tripled from a year earlier. In the first eight months, imports hit a record 73.92 million tonnes, 161% higher than a year earlier. China's coal imports are mostly used in coal scarce coastal provinces in southern China, which still rely on northern Chinese provinces for most of their supply.
Mr Li said that domestic coal supply was expected to be ample in the near term and likely to exceed demand given overcapacity and the uncertainty in economic recovery. He added that coal production capacity, in operation and under construction, had surpassed 3 billion tonnes per year, but demand in 2008 was 2.7 billion.

Source: Reuters