BIZCHINA> Top Biz News
Coal piling up at harbors on weak demand
Updated: 2008-09-28 09:46

Coal piling up at harbors on weak demand

Coal piles up at Yichang port, Hubei province in this photo taken on August 2, 2008. China is seeing more and more coal piles up at major transport harbors due to a weakening demand for the fossil fuel. [Asianewsphoto] 

China is seeing more and more coal piles up at major transport harbors due to a weakening demand for the fossil fuel.

An official with the Qinhuangdao harbor bureau said Friday, on condition of anonymity, that Qinhuangdao harbor in northern China recorded a coal pileup of 8.44 million tons as of September 16. That is at least 3 million tons more than regular levels. He added, every day for the past two weeks, the surplus of coal has increased by 100,000 tons.

Qinhuangdao harbor is the largest coal transport site in China. Its coal storage acts as a barometer of the coal market across the country.

The official said the harbor was only able to accommodate a coal pileup of 10 million tons.

A surplus of coal at major consumption areas is also increasing. The Guangzhou harbor in southern China had about 2.2 million excess tons of coal as of September 17. That's compared to a storage of 1.7 million tons at the beginning of June.

According to Guangzhou Port Group, trading volume has decreased since July, with a monthly turnover of only 3 million tons. In May and June the group was turning over 4-million-tons.

Coal is also piling up for major coal consumers.

According to Xie Juchen, head of the fuel section of China Electricity Council, coal pileup was 19.62 million tons in July. That's enough to meet a 10-day demand. At the beginning of September, the figure went up to 29.3 million tons, or enough for 15 days, Xie said.

Official data showed nationwide coal supplies in August were at 70.76 million tons. However, coal consumption was at 62.25 million tons, leaving 8.51 million tons to pile up.

Industry observers credited the mounting pileup to less demand.

For one, electricity enterprises used less coal during the Beijing Olympics and Paralympics because production was restricted, said Xie.

In the long term, however, global economic slowdown received the majority of the blame for the country's excess coal.

According to Wang Ling, a coal analyst with the United Metal Web, the slide of the economy squeezed demand for electricity, that from thermal power enterprises in particular.

Besides, Wang said, a relatively cool climate reduced demand for power this summer. He added, abundant rainfalls also ensured easier access to electricity generated by hydro power plants.

According to data provided by the National Bureau of Statistics, China generated 2.323 trillion kw of electricity in the first eight months of this year, a growth of 10.9 percent on the same period of last year.

(For more biz stories, please visit Industries)