Power-station coal stockpiles at China’s largest port for the fuel rose to the highest level in 32 weeks as prices slid to a three-year low.
Inventories of coal with an energy value of 5,500 kilocalories per kilogram at the port of Qinhuangdao climbed to 8.3 million metric tons as of yesterday, the China Coal Transport and Distribution Association said today in Beijing. That’s the highest since July 29, according to data compiled by Bloomberg. The price of the fuel for immediate delivery was at a range of 610 yuan ($98.22) TO 625 yuan a ton as of yesterday, down 5 yuan from the previous week and the lowest since October 2009, the data show.
Utilities in China, the world’s biggest energy user, cut coal consumption as hydro power generation increased in the first two months, according to Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian Ltd. Stockpiles also rose because the landed cost of imported coal is about 10 yuan to 20 yuan a ton cheaper than domestic supplies, she said. Coal at the Australian port of Newcastle, a benchmark grade for Asia, cost $89.15 a ton as of March 15, according to data from IHS McCloskey.
“Power plants are keen to restock inventories when domestic coal is still at a premium to imports, leading to high inventories,” Lau said. Chinese prices are “close to a bottom” as the country’s power demand is set to pick up in the second quarter, she said.
China’s hydropower generation from its biggest plants rose 24 percent to 82 billion kilowatt-hours in first two months, data from the China Electricity Council showed March 18. Thermal power generation rose 1 percent to 643 billion kilowatt-hours. Electricity use will increase by as much as 8.5 percent this year to as much as 5.33 trillion kilowatt-hours, the council, a group of the nation’s biggest electricity providers, said in a statement on its website.
Growth in total electricity output slowed to 3.4 percent in the first two months of 2013 from December’s 7.6 percent. Industrial production, which accounts for about two-thirds of the nation’s electricity use, had the weakest start to a year since 2009, data from the National Bureau of Statistics showed Mar. 9.
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