Coal prices rise on reduced transportation and expected consumption hike
Shanghai. April 21. INTERFAX-CHINA - Reduced railway transportation capacity and an anticipated rise in consumption have driven up coal prices in the past five weeks, according to industry analysts.
On the Bohai-Rim Steam-Coal Price Index (BSPI), the average price of 5,500-kcal coal grew RMB 29 ($4.45) per ton, up 3.77 percent, to RMB 799 ($122.55) per ton from March 23 to April 20.
The price of 5,500-kcal coal at Qinhuangdao Port, China's largest coal transshipment port, rose RMB 30 ($4.60) per ton, up 3.87 percent, to RMB 805 ($123.47) per ton over the same period.
Maintenance on the Datong-Qinhuangdao railway line began in March, resulting in reduced transportation volume, said Li Ting, a coal industry analyst with the Distribution Productivity center (DPPC) of China Commerce. This has resulted in shrinking inventories at ports, said Li.
According to Qinhuangdao Coal Net, a coal information portal, inventories kept by ports in the Bohai Economic Rim (BER) fell 30 percent from March 9 to April 20, down 5.04 million tons.
Prices have also risen in anticipation of the peak summer consumption period, said Li.
Recent hikes in on-grid power tariffs are causing coal prices to rise, said Li. The additional revenue gained from the hikes will allow thermal power plants to buy coal during the peak consumption period, when prices will grow further.
Li also noted that the rising prices at ports have also stimulated ex-work coal prices.
According to statistics released by the China Coal Transportation and Distribution Association (CCTDA), ex-work coal prices in major production regions, including Shanxi Province and the Inner Mongolia Autonomous Region, rose by between RMB 5 ($0.77) and RMB 30 ($4.60) per ton from April 11 to April 18.
China's industrial power consumption accounted for 291.4 terawatt hours (TWh) in March, up 13.80 percent year-on-year and 36.74 percent month-on-month, said the National Energy Administration (NEA).
- TW