1. General profiles and projections of China coal sector
Production V.S. Demand
It is projected by China Merchants Securities (CMS) that coal demand in China increases by 8.7% annually from 2007 to 2010, while only 8.4% annually for production. It is also predicted from 2008 coal import will exceed export.
Chart 1: Production V.S. Demand
Chart 2: Ratio of Demand to Production
Coal Consumption
Coal consumption in 2007 was around 2.5 billion tons and is expected by CMS to rise in 2010 to 3.2 billion tons, of which the main driving components are coal power plants, steel plants and constructions, as can be seen from Chart 3.
Chart 3: Components of Coal Consumption
Coal & Power
1.3.1 Position of Coal Power in China
? ? 78% of the whole power production.
? ? Most large coal power plants are located in northern and coastal provinces, resulting in huge coal transportation from northern part to coastal areas.
? ? Coal consumption for power weighs more than 50% in coal consumption.
1.3.2 Projection of Coal Consumption for Power
CMS forecasts that coal power increases by an annual rate of 13.5% between 2007 and 2010, from 271 million kwh to 390 million kwh. Due to China’s power industry policy of increasing energy efficiency, coal consumption for power will rise at 9.4%.
Chart 4: Coal Power Output Projection
Chart 5: Coal Consumption for Power
1.3.3 Coal Price V.S. Electricity Price
Electricity price in China is completely fixed by the government, while governmental interference in coal price is much less stronger. Pushed by soaring demand and increasing price of international energy market, coal price keeps on risin ...