-->Shortfall in Coal Supply to Remain
Jan 04, 2005
Jan. 4 -- China's coal industry is expected to fall short of demand in
2005, with some areas possibly being hit by striking shortfalls,
even though coal production will post robust growth.
The prediction was made at the ongoing week-long China 2005 Coal
Ordering Conference in Qinhuangdao, which started last Thursday.
The conference attributed the supply shortcomings to the
country's soaring demand for coal, inadequate coal production
capacity and transportation.
Major regions lacking coal will be concentrated in East and South
China, said Han Yong, a coal industry analyst with Shanghai-based
China Securities.
In East China, only a small number of areas, including Anhui and
Shandong provinces, produce coal, Han said, while remaining regions
like Shanghai, as well as Jiangsu and Zhejiang provinces yield
little coal, but are amongst the largest coal consumers nationwide.
China is expected to produce 2.05 billion tons of coal in 2005,
meeting basic coal needs, yet inadequate transportation will largely
bottleneck the country's market balance, said an industry insider
from China Coal and Coke Holding Ltd.
In an effort to relieve the situation, the government is planning
to further expand coal transportation routes from the country's coal-
rich regions, including Shanxi and Shaanxi provinces and the western
area of Inner Mongolia Autonomous Region in northern China, in 2005,
and at the same time, improve coal transportation facilities at
ports such as Qinhuangdao, according to official sources.
Han told China Daily the country is expected to improve the coal
transportation capacity of the railway between Datong, North China's
Shanxi Province, and Qinhuangdao Port, North China's Hebei Province
from 2004's 150 million tons to 200 million tons this year.
In order to increase China's coal production, the National
Development and Reform Commission (NDRC) aims to further improve
performance of the coal companies, by shutting down coal mines that
do not meet basic production conditions, and by regulating that new
coal mine and power plant construction accord with the State's
requirements.
The country is expected to speed up work on existing large coal
mines and fortify coal producers' technical strengths this year,
said Han Yong.
Large coal mines run more efficiently than small ones, said Han,
so the elimination of small coal mine construction projects would
not have a major impact on the country's coal supply.
Reinforcing supply efficiency
"Large coal mines boast 70 per cent to 80 per cent efficiency in
coal production, compared with the small producers' roughly 20 per
cent," said Han.
The NDRC is also attempting to streamline the coal supply and
demand information sharing system, with the purpose of reinforcing
the country's coal supply efficiency.
The government orders the coal industry association, power
generation units, and transportation sections to provide detailed
coal production information.
Han said the government is attempting, with this move, to promote
market regulation in the country's coal supply and demand, which
further signalled the establishment of a nationwide coal exchange
centre to replace the annual coal ordering conference.
Five areas will be given priority in coal supply in 2005,
including power generation, fertilizer production, steel production,
individual consumers and exports, said an official statement, in
order to guarantee China's stable economic development.
The week-long coal conference, in addition, stressed the
restriction of disordered construction in high energy consuming
industries, including steel, cement, and power generation, in order
to reduce irrational coal demand.
In 2004, the central government took a series steps to rein in
construction in sectors including steel and power generation, and
the endeavour is expected to continue this year, experts say, with
an aim to ensure an optimized economic structure and a balanced
energy supply and demand.
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