China Coal Price Rises as Qinhuangdao Stockpiles Plunge 25%

Coal for generating power rose at China’s Qinhuangdao port as inventories plunged to the lowest level in two years as utilities bought more before winter.

Coal with an energy value of 5,500 kilocalories per kilogram rose 0.6 percent to a range of 840 yuan ($132) to 850 yuan a metric ton yesterday, compared with two weeks earlier, according to data today from the China Coal Transport and Distribution Association. The association didn’t publish data a week ago because of a national holiday.

Stockpiles at the port, which ships half of China’s seaborne coal supplies, fell 25 percent to 4.41 million tons from two weeks earlier. That’s the lowest level since inventories dropped to 4.06 million tons on Oct. 11, 2009.

Power plants in China typically start buying fuel from late September before peak heating demand during the colder months. This year, the biggest railway carrying coal from the northern mining province of Shanxi to Qinhuangdao started repairs on Sept. 21 for as long as 15 days, according to the Qinhuangdao Seaborne Coal Market industry website. The Daqin Railway repairs would cut daily capacity by 300,000 tons, the website said.

“Stockpiles fell as supplies reaching Qinhuangdao decreased because of the Daqin maintenance,” according to a report published on the association’s website today. “Demand for coal also has risen as major power stations and heating companies started stockpiling coal early.”

Coal prices at Qinhuangdao are expected to remain steady in October as rising domestic demand is offset by increasing imports, the association said in the report.

China’s coal imports rose to a record 17.5 million tons in July, according to customs data. Overseas purchases fell to 16.6 million tons in August, still 27 percent above the 13.1 million-ton monthly average from January to August.

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