HONG KONG/BEIJING: China's major coal producers are ramping up production this year as global coal prices are set to firm further after Japan's quake sparked fears over nuclear power, though rising production costs will likely squeeze margins.
China Shenhua Energy Co Ltd, the country's largest coal producer, raised its coal sales forecast for this year, while Yanzhou Coal Mining Co Ltd aims to triple production over the next five years, top executives said on Monday.
"Global coal prices will hit a record high again this year and prices in China will trend upwards," Yanzhou Coal's Chairman Li Weimin told a news conference.
China's coal producers such as Shenhua, China Coal Energy Co Ltd and Yanzhou, will likely benefit from higher global coal prices after Japan's quake raised concerns over the use of nuclear energy, analysts said.
The coal market suffered short-term weakness after the early-March quake damaged port and shut power plants, forcing Japanese utilities to turn away cargoes, but the focus is now on recovery efforts, especially for several coal-fired power plants which may boost demand for coal.
Some analysts expect spot coal prices in China to rise 15 percent this year and 10 percent in 2012. Currently, China's thermal coal prices are trading around $120 per tonne.
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