Chinese Qinhuangdao Coal Price Rises an 11th Week on Winter Use

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

30 Nov 2009

Coal prices at China’s Qinhuangdao port, a benchmark in the world’s biggest producer and user of the fuel, rose for an 11th week as heating demand increased during winter. The price of coal with an energy value of 5,500 kilocalories a kilogram gained 3 percent to between 680 yuan ($100) and 700 yuan in the week ended Nov. 30, from a week earlier, according to data published by the China Coal Transport and Distribution Association today.
Coal prices at the northern China port have risen 35 percent from 510 yuan a ton in December after the nation’s economic recovery spurred industrial production. The heaviest snowfalls in six decades in northern Chinese regions have increased demand for the heating fuel.
“The snowfalls have boosted winter demand earlier than usual,” Zhang Hongbing, a coal analyst with Shanxi Securities Ltd., said by telephone from Beijing. “Extra coal demand for heating use makes winter, usually in December and January, the peak coal consumption period of the year.”
The Chinese government has asked energy producers to boost output to ease a supply shortfall caused by the cold snap this month. The heaviest snowfalls in a century in some regions in northern China have caused damage estimated at 4.5 billion yuan, according to the Ministry of Civil Affairs.
“We expect the Qinhuangdao coal price to remain stable or rise slightly, at least in the first half next year, as increased supply from small coalmines after restructuring will be offset by demand recovery,” Zhang said.
The world’s fastest-growing major economy expanded 8.9 percent in the third quarter, the most in a year. Oil processing rose to a record and power output grew at the fastest pace in more than a year after industrial production gained.

Source: Bloomberg