China’s Qinhuangdao coal, a national benchmark for the power-station fuel, fell for a fourth week as supplies remained above normal and the government capped prices, sources reported.
Power-station coal with an energy value of 5,500 kilocalories per kilogram declined 0.6 percent from a week earlier to a range of 770 yuan to 780 yuan a tonne, data from China Coal Transport and Distribution Association showed on Jan 10.
Coal stockpiles at the port dropped 1 percent to 6.98 million tonnes last week, according to data on Jan 10. That is a relatively high level for supplies at this time of year, according to Wu Jie, an analyst at Orient Securities Ltd.
Coal stockpiles remain ample despite freezing weather, Wu said by phone from Shanghai today. The cap on the 2011 contract coal price also curbs the rise of spot prices.
China’s government in Dec ordered a freeze on 2011 contract prices for thermal coal supplies to power stations at 2010 levels, after the nation’s inflation rose to the highest in 28 months in November.
Power-station coal stockpiles stood at 57.07 million tonnes as of Dec. 20, equivalent to 15 days of use. In previous years, supplies at this time of year were equal to about ten days of demand, David Fang, a director at the coal association, said by phone from Beijing on Jan 10.
The decline in prices will be limited because rising global coal costs will support Chinese demand, according to Fang.
News via en.sxcoal.com, 11 Jan, 2011
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