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Friday, 15 January 10
CHINA POWER FIRMS SEEK COAL IMPORTS, SUPPLY SCARCE


China's coal-hungry power plants have turned to imported coal to cope with widespread shortages, but spot supply is scarce, traders said on Thursday.

Coal stocks at China's major power plants edged higher from a week earlier to more than 20 million tonnes, sufficient for eight days of consumption by Wednesday, data by Zhongneng Power Industry Fuel Co and published on sxcoal.com, an industry data website, showed.

But some provinces and regions, including the eastern province of Anhui, central province of Henan, and the region around Beijing were at or below levels for 7 days of consumption, the data showed.

Power plants along the coast or even from inland provinces have been seeking imported coal as domestic supply failed to keep up with high winter demand due to limited production from key coal-producing regions such as Shanxi and transport bottlenecks caused by harsh winter weather.

Operations at ports along the northern China coast were threatened by the worst sea ice floes in three decades, but deliveries of coal from major ports were proceeding normally on Thursday, despite sporadic reports of delay in seaborne coal transportation.

"I've got inquiries from all over the place, including a power plant from inland Jiangxi province," said a coal trader in the southern province of Guangdong, but added that power plants gave up after comparing prices of domestic and imported coal.

Traders said they had few spot cargoes to sell to these power plants and the earliest delivery they could make would be in a few weeks.

"Some power plants wanted to buy one or two cargoes now, but I don't have any to sell to them. The earliest I can deliver will be mid-February or late-February," said a second coal trader based in the southern province of Guangdong.

For power plants along the southeastern coastline of China, imported coal is economic, even though prices of imported coal have rebounded from lows in early 2009. A trader based in eastern China's Jiangsu Province said coal from Indonesia was still about 10 percent cheaper than coal shipped from northern China.

In southern China's Guangzhou port, Indonesian coal with calorific value of 5,000 kcal/kg (NAR) was quoted at about 700 yuan ($102.5), while coal with the same calorific value from northern China was offered at 820 yuan a tonne, sxcoal.com said.

At Qinhuangdao, China's top coal-shipping port, prices of coal of the same grade rose about 4 percent from a week earlier to about 710 yuan a tonne.

But Indonesia, the second-largest source of China's imported coal, is already churning out coal at maximum capacity and unlikely to produce more to meet the appetite from China.

Supply of bituminous coal has been tight as Chinese buyers have been scouting for high-quality coal while rains in East Kalimantan province, Indonesia's key coal producing region on Borneo island, have slowed shipments.

Thanks to sluggish demand elsewhere in the world and cheap freight rates, Chinese buyers have looked for suppliers further afar in the past year, such as Colombia and South Africa.

The second Guangdong-based source said he had just booked two ships of coal from South America, bound to arrive in late February. ($1=6.826 Yuan)
Source: Reuters / Alibaba 



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