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Tuesday, 30 March 10
CHINA'S DROUGHT RAISES COAL PRICES, LOWERS HYDROPOWER


Bloomberg reported that, Benchmark coal prices at Qinhuangdao, China’s largest port handling the fuel, rose for the first time in 10 weeks after a drought in the south cut hydropower generation and raised demand from coal-fired plants. Prices for coal with an energy value of 5,500 kilocalories per kilogram rose 0.74 percent to between 675 yuan ($99) and 685 yuan a metric ton as of today compared with a week earlier, data from the China Coal Transport & Distribution Association showed. That’s the first increase since January 11.

The months-long dry spell in southwest China has affected 61.3 million residents and 5 million hectares of crops in the area, according to Xinhua News Agency. The drop in hydropower also caused less electricity transmission from the west to the eastern regions and led to higher output from coal-fired plants along the coast, the association said in a separate report.

Coal-fired power stations may need an additional 35 million tons of the fuel to compensate for a 15 percent drop in capacity utilization of hydropower, Dave Dai, a Hong Kong-based analyst at CLSA Research Ltd., said in a report e-mailed on March 26.

China Shenhua Energy Co., the nation’s largest coal producer, led gains today among shares of Chinese producers of the fuel on expectations the drought will raise demand. Shares rose as much as 1.1 yuan or 4 percent to 29.27 yuan in Shanghai trading. China uses coal in 80 percent of its power plants.
Source: Hellenic Shipping News / Bloomberg



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