China’s coal inventories may trouble importers
China imported 147.95 million tons of coal during the first seven months of 2005, up 55.4 percent year on year according to data from the country's Customs General Administration.
In addition,
China's Coal Transport & Sale Association indicated that the country's coal inventory increased nearly 20 percent since the beginning of the year to reach 125 million tons by the end of July. The coal inventory increased 10 milllion tons from June to July. According to
China's official media, the current coal inventory equals to 15-18 days
consumption of the country, which is a reasonable level. The rise in inventories also started to decrease coal prices slightly.
Meanwhile,
China's coal
production increased by 8.8 percent year on year to 1.12 million tons and coal sales grew by 10.2 percent to 1.07 million tons through the same period.
The increase in both imports and coal inventories indicates that there is still a high demand for coal. Meanwhile, the government is expected to carry out inspections on the nationwide coal producers. Due to safety and pollution reasons, many domestic coal mines are expected to be shut down as a result of the inspections. Therefore, coal importers haven't given up stocking coal which may substitute the decrease in domestic coal
production.
However, the recently begun dropping trend in coal prices may become a concern for coal importers soon.