Coal trade centre on China�s cards

CITING an oversupply of coal in the country, China plans to revamp its ordering system this year.

Angie Tomlinson

China’s National Development and Reform Commission estimated that the country’s domestic need will be 2.17 billion tonnes, with a total need of 2.25Bt, 1.21Bt of which will be utilised in power generation, Xinhua said Tuesday.

Output of coal, however, is seeing an upward trend, mainly due to new, renovated or expanded producers that have emerged in the last year. In fact, production capacity for the year has already been upped by more than 60Mt due to the growth of the production market, the news service said.

Adding to the supply and demand issue is the coal’s market price versus state-fixed price for power supply. Currently, according to Xinhua, the range is from 30 yuan ($US3.75) per tonne to 80 yuan ($US10) and can see highs of 100 yuan ($US12.50).

NDRC said some potential remedies to the problem included a tighter control of the approval of new coal production licences and forcing a state regulation for coal marketing management.