Exports accounted for 42% of Yanhzou’s sales in the first nine months of this year but the threat of a 7% import tariff on Chinese coal in Japan may force a reduction in sales to Japan.

Chief financial officer Wu Yuxiang said the company was confident it would surpass this year's sales target. Yanzhou sold 6.4Mt of coal in October and November.

Although the company would not begin sales negotiations with domestic customers until next month, Wu said a preliminary sales forecast of 36Mt had been set for next year.

He said the average domestic selling price this year was at least 10% higher than last year's, while the export price would be about 7.3% lower.

"Prices next year are expected to be fairly stable compared with this year."

Yanzhou expected at least 10% sales growth in the next two years but that was expected to drop off beyond 2004.

UBS Warburg has estimated Yanzhou's profit would rise by 2% for every percentage point increase in sales volume, while profit would improve 3% for each percentage point jump in sales price.

Sales to power companies have recorded year-on-year growth of more than 10% so far this year and accounted for about 70% of sales. Sales to steel producers grew 22% year on year and those to cement makers by 13%.