RPT-ANALYSIS-China domestic coal squabble opens door to imports

(Repeats a story issued on Tuesday with no changes in text)

By Rujun Shen and Fayen Wong

SHANGHAI/PERTH, Feb 17 (Reuters) - A months-long dispute between Chinese coal miners and power generators over annual prices has unexpectedly opened the door to rising imports, despite lacklustre demand and a supply glut.

Talks on an annual coal price deal for China's top five power producers -- Huaneng, Datang, Guodian, Huadian and China Power Investment Corporation -- have dragged on for almost two months without agreement, dissolving recently into a war of words.

The coal miners, led by industry giant Shenhua Group, want to raise prices by over 10 percent from last year, arguing that tax costs have gone up and term prices were anyway always too low.

The power firms firmly oppose a hike from last year's term price, which analysts put at about 460 yuan ($67.30) per tonne.

In an apparent effort to step up pressure on the miners to agree to lower prices, generators have been buying up more and more coal abroad, lifting total imports last month by 12 percent from December, a second increase after November's multi-year low.

"We've received quite a few orders for imported coal lately," said a Guangdong-based coal trader. "The psychological impact is more significant than the actual effect. The attitude is: if you don't sell to us, we will find coal somewhere else."

The miners have some support from officials, who have backed their call for a 50 yuan rise, and some plants affiliated to Huadian and Guodian may have weakened their stance by cutting a side deal with a small coal mine for about 530 yuan per tonne.

Asking for a price rise as the dust is still clearing on the biggest commodity price collapse in history may not be the coal miners' best-timed move. Power consumption has declined globally, including in China, and shipping costs have followed suit, so suppliers are going further to compete for less demand.

A price deal is widely expected to come eventually, but until it is struck, traders can try their luck in the world's biggest coal market. China produced 2.7 billion tonnes of coal last year, three times the amount traded on the global seaborne market.

Making sales won't be easy. The power firms are not under pressure to import since unwanted coal shipments have piled up at entry ports and China's power plants themselves held stocks of 36 million tonnes on Feb. 10, or enough supplies for 21 days, said Chen Liang, an analyst at Ping An Securities.

But they are buying nonetheless, with January imports rising to 2.99 million tonnes, despite slower industrial output, the passing of mid-winter and the fact that January had only 16 trading days because of holidays.

To see a graphic of China's coal trade, please click on: here

"Imports from Vietnam jumped in January, after Vietnam loosened up its policy on coal exports, and now prices are less than half the highest point in the last year," said the trader in Guangdong, adding that February imports were likely to climb too.

An executive at a large power company in southern China said his firm had imported a lot from Vietnam in January.