China's coal supply to grow in Q4: official

(Xinhua)

13:45, September 30, 2011

BEIJING, Sept. 29 (Xinhua) -- Coal output will grow in China in the fourth quarter of this year to essentially meet the energy demand of the world's second largest economy, an official forecast on Thursday.

There will be "a marked increase" in the country's coal production capacity as more medium-sized and large mines go into operation, said Wei Pengyuan, deputy head of the coal department of the National Energy Administration, at a press conference.

"The country's overall supply and demand of coal will be basically balanced," he said.

China's coal output rose 14 percent year-on-year to 323 million metric tonnes in August, according to data from the China Coal Transport and Distribution Association (CCTD).

However, natural disasters, extreme weather and high global coal prices could affect coal production and supply, Wei said.

Coal contributes about 70 percent of China's total energy consumption.

The Bohai Rim Steam Coal Price Index, China's government-run coal price gauge, has rebounded since the beginning of this month after a nine-week fall.

Soaring coal prices are sucking up the profits of many thermal power generators in China as electricity prices are set by the government, which is cautious on price hikes in order to check inflation.

Wei urged coal producers to keep coal prices relatively stable to prevent serious losses for power producing companies and other industries that rely on coal consumption.

The predicament of some thermal power producers has contributed to power shortages in some areas of the country this summer, said Jia Fusheng, an official with the National Development and Reform Commission, China's economic planning agency.

The government has tried to boost coal production and expanded coal imports to ensure power supply, he said. 

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