It is reported China main power plants hold 18 days of coal stock trimming further requirement. The coal prices which have soared 14 straight weeks correspondingly witness correction in July. BSPI has also declined for its third week in a row. Analysts said steady decline is to dominate domestic coal market in Q3. And the price adjustment in Q4 will await clear clues released by macroeconomic performance. But no repeat of last year's sharp downturn in Q4 will occur.
The thermal coal market eyed a spurt from March 16 to the end of May. BSPI jumped CNY 70 per tonne to CNY 837 per tonne by late May, placing it CNY 41 per tonne above last year highest CNY 796 per tonne on November 23. After that another CNY 6 per tonne increase was seen till June 22. Mr Li Xuegang Vice President of China Qinhuangdao Seaborne Coal Market Co Ltd. reckons that the robust growth of thermal power demand has bucked the domestic coal market downturn. He said that "China CNY 4 trillion plan during the financial crisis inevitably provides a stimulus to the bulls of high energy-consuming industries. The boost towards energy demand was begun to from late last year also contributed by the 12th Five-year Plan.'
Mr Li said the coal demand boom is closely related to this year''s power shortage. Industry insiders note coal deficiency was exaggerated. "Power shortage does exist, but not because of lack of coal. In the first four months, coal inventories of the nation''s major power plants are about 15 days of consumption. The speculation of coal shortage pushes price too high."
Coal imports pick up due to the surging domestic prices. China coal imports last year hit a record high of 164.83 million tonnes reflecting a 30.99%YoY increase. But from last October, the international spot coal prices underwent a dramatic rise whereas domestic market goes downward. Thus coal imports are gradually pinched by losses.