The declining trend of domestic coal price was not radically changed despite of the 4-trillion financial aid of Chinese government. With expanding world economic crises and sharply sliding coal demand in downstream industries, a gloomy outlook is predicted for China"s coal industry in 2009.
The surplus of domestic coal supply and sluggishness in downstream demand further decrease the coal price. Since Oct., the price for power coal has dropped by 50 percent.
Besides, the coal price is also closely related to the international oil price. According to statistics, the coal price at Newcastle Harbour has declined by 60 percent from the peak of 190 US dollars per ton in July to 76.09 US dollars per ton at the beginning of December.
The plunging coal price has trapped purchasing contract negotiations between coal enterprises and power generators into great embarrassment.
The National Development and Reform Commission of China has changed the description of domestic coal supply from "balanced" to "relaxed", which suggests a general coal oversupply in Chinese market.
Meanwhile, the policy adjustment also brought negative impact to coal industry. The added value tax charged on coal enterprises has been raised to 16 percent from 13 percent, which would impose great pressure on the operation performance.
Besides, the coal resource tax is likely to be charged according to value for about 10 percent rather than volume. The above two parts would approximately increase the coal production cost by 50 yuan per ton.
Under the present circumstance of relatively relaxed coal supply in domestic market, coal enterprises may have to face difficulties in cost transfer.
|
