China's coal imports surged by 126.3 percent year-on-year in the first half of 2009, reaching 48.3 million tons, according to statistics released yesterday by China Customs.

Coal exports, at 11.7 million tons during the same period, decreased by 54.2 percent. Net coal imports reached 36.6 million tons, compared to 3.9 million tons in the same period last year.

China's raw coal output totaled 1.4 billion tons in the first half of the year, up 8.7 percent year on year, 6.1 percentage points lower than a year ago period, the National Development and Reform Commission disclosed on its website yesterday.

Analysts said the relatively higher domestic coal prices might have been the reason for the increase in coal imports.

Coal companies at the annual coal price negotiation conference wanted to increase term prices this year by 4 percent to pass on their higher tax burden and other rising costs. But power generators hoped to cut prices by 50 yuan per ton, to ensure that they would not sink into the red this year.

The tussle between the coal miners and power generators would push some of the enterprises to seek overseas coal, analysts said.

Early this month, some enterprises in Guangdong province, including Guangdong Yuedian Group, signed contracts for coal supply with the Vietnam Coal Corp (VINACOL).

The contracts involved 7 million tons coal supply from VINACOL, including about 3 million tons to Yuedian.

Zhai Ruoyu, general manager of China Datang Corp, previously said Datang was considering purchasing coal from overseas markets, such as Vietnam, Indonesia and Australia, since the price may still be lower than the domestic rates, even with transportation costs factored in.

Liu Caiying, deputy director of the China Coal Industry Association, said it was possible that the country's coal supply might still exceed demand.

The NDRC said that coal stockpiles at Qinhuangdao port was 6.5 million tons, and had increased by 650,000 tons year-on-year; and coal storage at major power plants was 33.1 million tons, a 11.3-million ton rise year-on-year.

Liu said, based on the current economic situation, major coal producing regions like Shanxi and Henan province, should still put a cap on production.

(China Daily July 23, 2009)