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Coal Imports May Drop in China on Growth, Hydro: Energy Markets
2010-08-03 06:04:15.698 GMT
By Bloomberg News
Aug. 3 (Bloomberg) -- China, the world's largest energy
consumer, may reduce monthly coal imports to the lowest level in
more than a year in the second half as the economy cools.
Purchases may drop to 59.5 million metric tons, or 9.9
million tons a month, from 81 million tons in the first six
months of the year, a decline of 27 percent, according to the
median estimate of four industry officials and analysts surveyed
by Bloomberg News. The monthly forecast would be the smallest
level of imports since May last year.
The growth in China's power consumption may slow to about 5
percent in the second half from 22 percent in the first, the
China Electricity Council said July 26. Premier Wen Jiabao is
trimming loans while implementing measures to cut pollution from
power plants that run on fossil fuels.
"Demand growth from industries, including power, steel,
construction material and fertilizer, has seen a noticeable
decrease since April, and we expect the gain to ease further
during the rest of the year," said Shi Yu, an analyst with
China Merchants Securities Ltd. in Hong Kong.
China's July manufacturing data were the weakest in more
than a year, a purchasing managers' index released yesterday by
HSBC Holdings Plc and Markit Economics and a separate gauge
published Aug. 1 by the government's Federation of Logistics and
Purchasing showed. China's economy may expand 10.1 percent this
year, according to the median of 27 economists' forecasts
compiled by Bloomberg, down from last year's 10.7 percent.
Local Is Cheaper
Shipments to China may also decline because imported coal
is more expensive than domestic supplies, said Huang Teng,
general manager of Beijing LT Consulting Ltd. and a former
trader at China National Coal Corp., the nation's second-largest
producer. Australia and Indonesia were the top suppliers to
China last year, accounting for about 60 percent of imports.
Coal at Qinhuangdao port fell 1.3 percent, the most in four
months, to between 740 yuan ($109) and 750 yuan a ton as of July
26. It was the first decline during the peak summer period since
2007, according to sxcoal.com, a Shanxi, China-based data
provider. Coal shipped from the Australian port of Newcastle
costs about $95 a ton plus $17 freight, and taxes, Huang said.
Prices may decline 3 percent to 722.5 yuan ($107) a ton by
December from current levels, according to the survey.
Coal loading volume at Qinhuangdao, the nation's largest
transit port of the fuel, fell 4.8 percent to 18.54 million tons
last month from a year earlier, according to data released today.
China, the world's biggest producer and consumer of coal,
may have a surplus in the second half as demand wanes, Wu
Chenghou, a senior adviser to the China Coal Transport and
Distribution Association, said June 3.
Demand Growth
Coal consumption may increase 8 percent for all of this
year, according to Martin Wang, an analyst with Guotai Junan
Securities Ltd. It jumped 14 percent in the first half and 20
percent in 2009, according to data compiled by Bloomberg.
The amount of electricity generated from China's hydropower
stations rose 29 percent to 71.5 billion kilowatt-hours last
month, reducing demand in a country where coal provides 80
percent of its power, the National Development and Reform
Commission, China's top economic planner, said July 7.
Demand may pick up "a bit" as power plants stockpile
after flooding in southern China eases, Beijing LT Consulting's
Huang said.
Flooding and landslides destroyed almost 450,000 homes and
ruined more than 400,000 hectares (988,422 acres) of farmland
since the beginning of July at a cost of about 52.7 billion yuan,
the Ministry of Civil Affairs said July 27.
Sufficient Stockpiles
Chinese power plants had sufficient coal as of a month ago,
Zhou Xi'an, head of the National Energy Administration's general
office in Beijing, said on July 20. Stockpiles rose 8.2 percent
to 58 million tons at the end of June from a month earlier,
according to the NDRC. Inventories in Hunan province, which
typically has a power shortage in summer, rose to a record 4.2
million tons, the news portal Changsha.cn said on July 29.
China's overseas coal purchases fell to 12.11 million tons
in June from a record of 16.38 million tons in December as costs
increased. The price of Newcastle coal with an energy value of
6,700 kilocalories per kilogram rose 9 percent this year,
according to McCloskey Group Ltd.
China became a net coal importer for the first time in 2009
after purchases from overseas more than tripled to a record of
125.8 million tons from a year earlier. It bought 41 million
tons in 2008 and 51 million in 2007.
For Related News and Information:
Top Power Stories: PTOP <GO>
Coal mining: TNI COAL MNG <GO>
Coal and the environment: NSE CLIMATE COAL <GO>
Top energy news: ETOP <GO>
TOP climate news: TOP ENV <GO>
Coal markets: COAL <GO>
--Winnie Zhu, Baizhen Chua. Editors: Clyde Russell, Jane Lee.
To contact the reporters on this story:
Winnie Zhu in Shanghai at +86-21-6104-7013 or
wzhu4@bloomberg.net;
Baizhen Chua in Beijing at +86-10-6649-7561 or
bchua14@bloomberg.net
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net
