thermal coal prices set to rise

Coal stockpiles China's largest coal port in Qinhuangdao in Hebei Province dropped by 36.1 percent to 5.3 million tonnes as of December 21 compared to last month, according to the China National Coal Association (CNCA).

The stockpiles at Qinhuangdao port are a domestic benchmark for the country's coal industry, the price of the coal with calorific value of 5,500 Kcal/kg at the port is now around 740 (US$109) yuan per tonne, or 20 yuan higher than that of two weeks ago.

Li Chaolin, a coal industry expert, said the rising trend of thermal coal prices may continue as a result of coal-mining industry restructuring, cold weather and rising demand from the country's power generators.

"China's power generators consumed on average a record high of 2.4 million tonnes of thermal coal per day in the first nine days of December, which indicates that the real economy is on the track of continuous robust recovery," said Wang Shuai, an analyst at Shanghai-based Orient Securities Co. Ltd. "That will give thermal coal prices a lift."

The CNCA estimated that the thermal price of coal in 2010 will fluctuate at a higher-than-normal range.

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