| BEIJING, Sept 4
BEIJING, Sept 4 China's coal prices, already
near a two-year low, are likely to fall further as industrial
demand growth slows and imports add to pressure on domestic
stocks, i nd ustry officials said on Tuesday.
Benchmark prices in China, the world's top producer and
importer of the fuel, have been lolling at two-year lows of 626
yuan ($98.50) a tonne since end-July amid a global supply glut.
Hou Wenjin, a coal industry official with the Shanxi
government, the country's second-biggest coal producing region,
predicted China's 2012 imports could top 200 million tonnes as
coastal utilities lock in cheaper foreign supplies.
"Overall inventories, at over 80 million tonnes, are still
much higher than normal levels, so I don't think there will big
demand even for winter restocking," he said.
Imports of more than 200 million tonnes would compare with
2011 imports of 182.4 million tonnes. January-July imports
totalled 133 million tonnes, a rise of 51.8 percent over a year
earlier, customs data shows.
China produced 3.52 billion tonnes of coal in 2011 and has
set a target of 3.65 billion tonnes this year. Officials spoke
an industry conference on Tuesday.
Chen Ze, deputy director with the coal industry department
of the government of Inner Mongolia, China's biggest coal
producing region, said demand growth from key industrial users
such as those in the steel and cement sectors would "most likely
A slump in the Chinese steel sector has also put coking coal
prices under pressure, and this will have knock-on effects for
coal as a whole, said Dong Yueying, secretary general of the
China Coal Transportation and Distribution Association.
"Falling prices means it is no longer economical for mines
to wash the coal to get higher specifications. So more mines
will sell into thermal markets," he said.
Chen of the Inner Mongolian government said he expected a
"flood of imports" to compound the oversupply problems on the
"We expect to see strong exports from the United States due
to the shale gas boom, and also increased shipments from
Australia, Indonesia, Columbia and South Africa because demand
in Europe is poor so everyone will try to move their coal to
China," he said.
"We may see supply growth surpassing demand over the coming
months as China's economy cools."
(Reporting by Fayen Wong; Editing by Neil Fullick)