China's thermal coal prices posted its first fall in three weeks and stockpiles at the key port rose, even as a growing number of provinces have begun to ration power because of dwindling coal stocks at power plants. The anomaly was because many power companies, already suffering heavy losses due to the recent spike in coal prices, have refused to buy more coal in the spot market because of the recent surge in prices, utilities sources said on Friday.
Coal with calorific value of 6,000 kcal/kg (NAR) fell by five yuan from a week ago to hover in the range of 835 yuan to 845 yuan ($126.40-$127.16) per tonne in the week to December 24. Prices have fallen 20 yuan from the end of November, when they rose to their highest in two years.
Coal with a heating value of 5,500 kcal/kg also eased to between 780-790 yuan, while coal stocks at Qinhuangdao rose to 7.59 million tonnes, its highest in at least two months. "Spot prices are too high. Our fuel costs keep increasing but power prices haven't changed. It doesn't make sense for us to keep buying stock because every tonne that we buy, we'd be making a loss," said a manager at a utility in Hubei province. Earlier this month, an official from the China Electricity Council told local media that China's five state-owned power firms such as China Huaneng Group and Datang Corp, were easily running at 50 percent losses this year due to high coal prices.
A growing number of provinces in central and northern China, including Shanxi, Shaanxi, Henan and Hubei, have started rationing power supplies to users in recent weeks, as coal stocks at power plants dwindled, with 40 percent of plants in Henan reportedly having no more than three days of supplies. Henan has reduced power supplies to aluminium and lead smelters by 20 percent from this week, hurting operations in the country's top producing province for the two commodities.
Comments
Comments are closed for this article.