Coal supply is tight in this year; China will become coal import country

08:04 May 26, 2008, source: www.cnstock.com

On the “4^th Chinese energy strategic high-end forum – coal industry summit” on 24, Yang Xianfeng, general secretary of China Coal Transportation and Sales Association said, it was expected that the coal supply and demand growth margin will both drop this year. The coal demand in this year will reach 2.74 billion to 2.82 billion ton. The coal supply is tighter than that of last year, and the price will continuously rise, it is expected that in this year China will become a coal importer.

Transportation ability and coking coal production capacity are both limited

Though the production capacity increases this year, due to the fact that the transportation bottleneck is intensified, the effective coal production capacity has obviously dropped. According to the construction cycle of various coal mines under construction, it is expected by the coal transportation and sales association that, there will be over 240 million tons of production launching capacity. At the end of 2007, the production capacity of coal mine is 274 million ton/year (it is expected that the actual production capacity will be 2.62-2.65 billion ton), by the end of 2008, the production capacity will reach 2.98 billion ton/year, which is in surplus compared with the upper limit of coal demand of 2.82 billion ton. In 2008, the national railway will increase coal transportation of 60 million yon/year, and Shensuhuang line is expected to increase 14 million ton/year, total growth rate will obviously drop than 2007, which will lead to the obvious drop of effective coal production capacity than 2007, this will lead the obvious drop of effective coal production growth.

On the other hand, it is expected that the total coking coal production capacity of 16 main coke producers will increase their production capacity; the net growth of coking coal production capacity is in the valley period in 2008.

According to Yang Xianfeng, the growth margin of coal demand in this year is expected to drop to 6-8%, the demand will be 2.74-2.82 billion ton, and the coal demand will transfer from rapid growth to steady growth. He pointed out, on the one hand, as influenced by macro control, the investment growth rate of key trade influencing coal demand will drop; and on the other hand, the growth margin of main coal-exhausting product output will also continuously drop. Of which, the growth margin of thermal power generation growth will drop to around 12%, the growth margin of crude iron output growth margin will drop to around 9%, the cement output growth margin will drop to around 11%, while new coal-type industrial product output will grow rapidly.

Meanwhile, Yang Xianfeng said, the key power coal contract price in 2008 will rise due to the tight supply and demand. While, due to tight supply and demand, the international price of coking coal will rise by large margin, and will continuously rise.

The situation of net import will reappear

Yang Xianfeng says, China will become a country of net coal import this year. He thinks, the effective supply ability of coal in China will be generally tight; on the other hand, the new thermal power generation set will focus in southeast coastal area, and restricted by bottleneck, there are still coal supply gap in southeast coastal area, import is needed; meanwhile, the coal export, influenced by policy, maybe further restricted.

In recent year, China has always assumed the tendency of coal export reduction, and import continuously increases. In this march, the import of coal in China is 2.75 million ton higher than export volume, and China has become a county of net coal import. In March, the import of coal in China is 4.2 million ton, and export 1.45 million ton. In the first quarter, the import of coal has a year-on-year drop of 21.3% to 11.26 million ton; the export drops 10.7% to 10.20 million ton. It is in the first quarter of 2007 that China becomes a country of net coal import, when the net import volume of coal is 2.89 million ton.

However, some people think, China has rich coal resource, which doesn’t mean in the future, we will more rely on foreign coal. The present problem is that the efficient production capacity of Chinese coal is insufficient. The net import of coal is only a temporary phenomena, not meaning that China will change into net coal import country in the future, in the future, China’s coal import and export will be in the generally balance tendency.

Effective supply will be continuously released

As measured by China Coal Transportation and Sales Association, the effective supply capability of coal mine will keep an annual growth of 9% in 2009 and 2010. According to Yang Xianfeng, since the present coal mine and coal mine under construction have a total production capacity of around 3.1 billion ton, considering the resource integration and eliminating the backward, it is expected that the coal mine production capacity in 2010 can reach 3.1 billion ton, with an average annual growth of 115 million ton. At the same time, we estimate that the railway coal transportation ability outside “three west” area in 2009 and 2010 will increase by 300 million ton. Based on the above elements, the effective supply ability will be improved.

Meanwhile, the growth margin of coal in 2009 will drop. Yang Xianfeng predicts, in the next few years, the coal supply and demand will keep balance, and there is large possibility to be slightly loose. Yang Xinfeng thinks, according to control target of “the 11^th 5-year plan” of unit GDP energy exhaust drop of 20%, the coal demand growth speed after 2009 must be lowered to around 3.5%, forming big contrast with the quick growth of coal effective supply capability in the future, the coal market may face the pressure of surplus.

Yang Xianfeng suggests, that China shall discuss to establish coal emergency reserve system, and national reserve and enterprise obliged reserve shall be combined; develop large-scale coal enterprise group, increase the control of coal control; we shall also discuss to establish national coal trade center, to guide the market to form reasonable prospect. (Li Yangdan, Li Jijun, Huang Liping)