Chinese Coal Price Drops as Supplies Pile Up
15 July 2014 14:08 WIB
TEMPO.CO, Jakarta - The base price of thermal coal in China has dropped to its lowest level since the last seven years. One of the factors that caused the decrease was the abundance of coal supply in the middle of the slowing Chinese economic growth.
The price of coal with an energy value of 5,500 kilocalorie per kilogram in Qinhuangdao harbor drops to 500 Yuan, or equivalent to US$ 80.60 per metric ton. “Based on the data from Chinese Coal Transport and Distribution (CCDA) in Beijing, that is the lowest price point since December 2007,” Bloomberg reported.
The drop in prices is mainly caused by the slowing economic growth of China, which leads to a reduced thermal coal consumption in the country. China is the biggest coal user in the world for their power plants and harbors. Currently, the supply of coal in Qinhuangdao harbor increased to 7.34 million tons from last week’s supply of 230,000 tons. Bloomberg reported that the price of coal will not recover until September 2014.
Despite being at a record-low, coal price in China is actually still considerably higher compared to Indonesia. Based on the data by the Directorate General of Mineral and Coal at the Ministry of Energy and Natural Resources (ESDM), the base price of coal as of May 2014 is recorded at US$ 73.6 per ton.
RAYMUNDUS RIKANG R.W.