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Saturday, 09 May 09
CHINA PLANS TO BUILD COAL STOCKPILE BASES IN SHANDONG - BLOOMBERG


China, the world’s largest coal producer and consumer, plans to build stockpiles of the fuel in the eastern province of Shandong to ensure supplies and help stabilize prices, the nation’s top economic planner said.

The province will complete the construction of four to six coal stockpile bases within the next three to five years, the National Development and Reform Commission said in a statement on its Web site today. The bases will each have a capacity to store more than 20 million metric tons of coal.

Shandong’s annual coal shortage may rise to more than 190 million tons next year, according to the commission. Coal prices at China’s Qinhuangdao port, a domestic benchmark, soared to a record in July last year and since then have almost halved as the global recession reduced energy demand.

"The province needs to build coal stockpiles and transit bases urgently to cope with potential energy supply disruptions,” the commission said. "Coal resources will become tighter in the long term, and it will be harder to secure resources from the outside market.”

Shandong, the nation’s second-most populous province, produced 135 million tons of coal last year, while provincial demand was 270 million tons, the commission said. By next year, coal consumption may rise to 311 million tons and output may be less than 150 million tons, the economic planner said. China produced 2.6 billion tons of coal in 2008.

Coal Imports

The bases will be stocked with coal from local mines and possibly imports from countries including North Korea, Indonesia and Vietnam, the commission said, without elaborating.

"Shandong needs more coal from the outside market compared with other provinces, so it’s necessary for them to build some stockpiles,” Wang Shuai, a mining analyst at Orient Securities Co., said by telephone in Shanghai. “On a national level, it may not be that urgent to build coal stockpiles now as China is self-sufficient.”

The four bases will be located in Longkou, Laiwu, Zhucheng and Qihe in the first phase and two more will be built in Rizhao and Heze “when the time is ripe,” the commission said.

The base in Longkou city will start operations in October and will eventually have a capacity of 50 million tons, the commission said.

Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ashxl8kfqenM



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