July 29 (Bloomberg) -- Power-station coal in China fell to a four-year low as industrial demand declined amid evidence the economy is slowing.
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 ($91.34) to 575 yuan a metric ton as of yesterday, the China Coal Transport and Distribution Association reported today. That’s the lowest since July 27, 2009, according to data compiled by Bloomberg. Prices have decreased 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 Aug. 1. The economy is forecast to advance by a median 7.5 percent this year, according to 55 economists surveyed by Bloomberg this month. Last month’s projection was 7.7 percent.
“We see weak demand from industrial users in the first half-year, especially from heavy industrial sectors, who are major coal users,” Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian Ltd., said by phone. “As the economy further weakens, we expect coal prices could go as down as 550 yuan a ton for the second half-year.”
China’s coal demand rose 1.8 percent in the first six months of 2013 to 1.93 billion tons, the China National Coal Association said in a statement on July 18. The gain was 1 percentage point down from the same period last year and 7.6 points lower than in 2011.
Power use in secondary industries, which include energy-intensive mining, manufacturing and construction companies, climbed 4.9 percent in the first half-year, the China Electricity Council said in a statement on July 26. The nationwide average is 5.1 percent.
Gross domestic product increased 7.5 percent in April-to-June from a year earlier, down from 7.7 percent in the first quarter. Growth was the slowest in three periods and extended the longest streak of sub-8 percent expansion in at least two decades.
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