China Coal Price Falls to Four-Year Low Amid Economic Slowdown

Power-station coal in China fell to a four-year low as industrial demand declined on account of the slow economy.

Coal, with an energy value of 5,500 kilocalories a kilogram at Qinhuangdao, the country's biggest shipping port for the fuel, slid to a range of 560 yuan (US$91.34) to 575 yuan a metric ton as of yesterday,as per the report from China Coal Transport and Distribution Association. That's the lowest since July 27, 2009, according to data compiled by Bloomberg. Prices have decreased since the past six weeks.

A preliminary index of manufacturing from HSBC Holdings Plc and Markit Economics last week trailed estimates and would be the lowest in 11 months if confirmed in the final report on August 1 '13. The economy is forecast to advance by a median 7.5% this year, according to 55 economists surveyed by Bloomberg this month. Last month's projection was 7.7%. 

“We see weak demand from industrial users in the first half-year, especially from heavy industrial sectors, who are major coal users. As the economy further weakens, we expect coal prices could go as down as 550 yuan a ton for the second half-year,'' stated Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian Ltd.

China's coal demand rose 1.8% in the first six months of 2013 to 1.9 billion tons, the China National Coal Association stated in a statement on July 18. The gain was 1%, down from the same period last year and 7.6% lower than in 2011.

 – Sourced