Coal prices, imports to firm

• Published 29 Oct 2009

A confluence of surging domestic demand mixed with factors constraining supply suggest that domestic coal prices and imports are set to firm considerably over the coming weeks.

In spite of increases in imported oil in recent years, the rise of nuclear and hydro power and a growing acceptance for alternative energies, China still basically runs on coal. Thus, when power plants complain of dwindling stocks, an uncompromising industry overhaul is underway in the main coal producing region of Shanxi and inventories at Qinhuangdao, the country's largest coal port, fall well below 'alarm levels', the implications for the wider economy would appear to be profound.

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