China coal price rises on demand, snow disruption

The price of coal with an energy value of 5,500 kilocalories a kilogram gained 1.6 percent to between 640 yuan ($94) and 660 yuan in the week ended Nov. 16 compared with assessments in the previous week, according to data published by the China Coal Transport and Distribution Association today.

The heaviest snowfalls in a century in some regions in northern China have affected about 7.6 million people in seven provinces and caused damage estimated at 4.5 billion yuan, according to the Ministry of Civil Affairs. Snowstorms trapped thousands on frozen highways and affected fuel deliveries.

“The unexpected snowfall has affected coal transportation on highways and increased market concern of tight supplies during peak winter consumption,” Li Dagang, a coal analyst with Essence Securities Ltd, said by telephone in Shanghai today.

China's government today ordered power plants to increase their stockpiles of coal to ensure adequate fuel supplies after cold weather and heavy snow disrupted transportation.

The National Development and Reform Commission, the nation's top economic planner, also instructed oil refiners to increase production of diesel with a lower condensation point, according to a statement on its Web site today.

Coal inventories at major power plants in Shandong province dropped to 15 days of use from 17 days after snowfalls boosted demand for coal burned for heating, the 21st Century Business Herald reported on Nov. 13, citing the local government.

China Shenhua Energy Co., the nation's top producer of the fuel, gained 5 percent to 37.26 yuan at a.m. in Shanghai and China Coal Energy Co., the second-largest, climbed 5.5 percent to 14.51 yuan.

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