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Coal price likely to dip in second half
By Wang Ying and Sun Xiaohua (China Daily)
Updated: 2005-07-25 05:41

Coal prices, after years of going up, are expected to drop slightly in the second half of the year, said industry experts over the weekend.

Coal ships sail through water gates of the Gezhouba power plant on the Yangtze River in Yichang, July 14, 2005. [newsphoto]
Petroleum prices, however, rose over the weekend in line with the rise of oil prices on the world market.

Reasons for the possible fall in coal prices include increased production and imports. Plus, more demand could be a factor since the nation's tightened controls of its highly energy-dependent industrial sectors such as steel and petrochemicals have taken effect, said Guo Yuntao, director of the China Coal Industry Development Research Centre (CCIDR), speaking at the China Coal Market Conference 2005 on Saturday.

China's demand for coal is projected to rise by some 150 million tons this year, compared with an estimated annual increase of 200 million tons in coal output for the same period, said Guo.

"The market situation shows coal supplies to date, especially for the country's power generators, have seen a lot of improvement. The more balanced supply and demand in the coal market is likely to result in lower prices," Guo said.

According to statistics from the Shanxi Coal Industry Bureau, the average coal price in major companies in the nation's largest coal-producing province dropped 2.7 per cent to 292 yuan (US$36) per ton in May compared with the figure in April.

Furthermore, the country's tax policy change to encourage coal imports while cutting exports has also enhanced the domestic coal supply.
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