Coal Piling Up at Chinese Harbours on Weak Demand

Text of report in English by official Chinese news agency Xinhua (New China News Agency)

BEIJING, Sept. 27 (Xinhua) – China is seeing more and more coal pile up at major transport harbours due to a weakening demand for the fossil fuel.

An official with the Qinhuangdao harbour bureau said Friday, on condition of anonymity, that Qinhuangdao harbour in northern China recorded a coal pileup of 8.44m tons as of Sept. 16. That is at least 3m tons more than regular levels. He added, every day for the past two weeks, the surplus of coal has increased by 100,000 tons.

Qinhuangdao harbour is the largest coal transport site in China. Its coal storage acts as a barometer of the coal market across the country.

The official said the harbour was only able to accommodate a coal pileup of 10m tons.

A surplus of coal at major consumption areas is also increasing. The Guangzhou harbour in southern China had about 2.2m excess tons of coal as of Sept. 17. That’s compared to a storage of 1.7m tons at the beginning of June.

According to Guangzhou Port Group, trading volume has decreased since July, with a monthly turnover of only 3m tons. In May and June the group was turning over 4m-tons.

Coal is also piling up for major coal consumers.

According to Xie Juchen, head of the fuel section of China Electricity Council, coal pileup was 19.62m tons in July. That’s enough to meet a 10-day demand. At the beginning of September, the figure went up to 29.3m tons, or enough for 15 days, Xie said.

Official data showed nationwide coal supplies in August were at 70.76 million tons. However, coal consumption was at 62.25m tons, leaving 8.51m tons to pile up.

Industry observers credited the mounting pileup to less demand.

For one, electricity enterprises used less coal during the Beijing Olympics and Paralympics because production was restricted, said Xie.

In the long term, however, global economic slowdown received the majority of the blame for the country’s excess coal.

According to Wang Ling, a coal analyst with the United Metal Web, the slide of the economy squeezed demand for electricity, that from thermal power enterprises in particular.

Besides, Wang said, a relatively cool climate reduced demand for power this summer. He added, abundant rainfalls also ensured easier access to electricity generated by hydro power plants.

According to data provided by the National Bureau of Statistics, China generated 2.323 trillion kw of electricity in the first eight months of this year, a growth of 10.9 per cent on the same period of last year.

Originally published by Xinhua news agency, Beijing, in English 1245 27 Sep 08.

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