Bloomberg reported that China, the world’s largest coal producer and user increased net imports of the fuel to the highest in at least 4 years in February after power producers boosted overseas purchases on lower costs.
According to data released by the Customs General Administration of China in Beijing recently, net coal purchases rose to 3.44 million tonnes after imports climbed 73% to 4.88 million tonnes and exports fell to 1.44 million tonnes from a year earlier.
Chinese power companies are buying overseas coal as benchmark prices fell to USD 62.10 tonnes in the week ended March 13th 2009 at Australia’s Newcastle port, compared with an average of USD 129 a tonnes in 2008. Imports have risen as talks on annual supplies from domestic coalminers have been deadlocked since December because of disagreements over price.
Mr Wang Shuai chief coal analyst with Orient Securities Limited said that “Falling international coal prices have prompted Chinese utilities to increase overseas purchases.”
The Shanghai Securities News said recently that 3 Chinese power producers bought 390,000 tonnes of coal from Russia and Indonesia.
Mr Zhai Ruoyu chairman of Datang International Power Generation Company said that his company is in talks to buy less than 1 million tonnes of coal from Australian suppliers.
According to the China Coal Transportation and Distribution Association, the coal price at Qinhuangdao port was unchanged at CNY 557.5 tonnes as of March 16th 2009 compared with a week earlier. The Qinhuangdao coal price has fallen from a July record of CNY 995 tonnes.
Mr Wang said that “Given recent weak spot prices, we don’t think the 2009 contract price will rise from last year’s level.”
Mr Xie Juchen a fuel purchasing director at China Electricity Council said that Chinese coalminers aimed to charge power producers 10% more for the fuel under the 2009 annual contracts while power producers wanted a price cut of as much as 10% as electricity demand has fallen.
(Sourced from Bloomberg)