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Coal price might surge 12% this year

By Hao Yan (chinadaily.com.cn)
Updated: 2011-01-19 14:03
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The coal price may continue to rise, and it might surge more than 12 percent this year, 21st Century Business Herald reported.

UBS Securities Co Ltd Tuesday released its forecast on China's coal industry for this year, saying coal imports are set to slow down, because it is cheaper to buy coal domestically.

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According to the report, estimates for a higher coal price are based on the rising costs of exploring, growing demand, and the increasing capital liquidity, Bai Zhongyi, research director of Asia-pacific mining industry at UBS Securities, said.

The flood in Australia's Queensland struck the international coking coal supply, as Queensland exports about 30 percent of the total coking coal on the market, Bai said.

Zheng Lei, associate director at CMB International Capital Corp Ltd, said various factors contribute to the fluctuations of the coal price on the domestic market, so it is hard to judge the accuracy of the estimate of a 12 percent price rise. He also said the price is controlled by future changes in policy.

"The coal price should climb for sure, in the long run. But in the short-term, in case the government places price cap in a quarter or two, then enterprises will have to do so," Zheng said.