|
|
 |
FAQ Message |
| |
 What are the Company's estimates of the supply and demand situation of the coal market for 2007 and what are its corresponding measures for securing fuel supply? |
As regards the nation's coal demand, in 2007 energy demand will continue to grow in line with economic development as China further implements its Eleventh Five-Year Plan. However, the growth in coal demand will tend to stabilise as the acroeconomic control measures begin to take further effect, the economic structure and economic growth patterns change gradually and social energy conservation and consumption reduction measures are further enforced. The country's coal demand is expected to reach around 2.5 billion tonnes in 2007.
In terms of production capacity of coal mines throughout the country, China's current nationwide capacity is 2.35 billion tonnes/year. Considering the capacity of 800 million tonnes/year from mines currently under construction that will commence operation successively in the next few years throughout the country, production capacity growth in the nation's coal market is anticipated to be equal to or even slightly higher than demand growth, even if the anticipated closures of some small coal mines in 2007 and 2008 are taken into account.
Coal transport capacity will maintain stable growth in 2007. Upon completion of Daqin Railway's transformation programme, coal transport capacity will increase by 50 million tonnes to 300 million tonnes in 2007, while coal throughput capacity at the seven ports in the northern part of China, such as Qinhuangdao, will exceed 500 million tonnes upon completion of the transformation programme. Despite regional differences in transport capacity assurance, the nation's coal transport capacity, as a whole, is basically capable of coping with a stable increase in demand.
In terms of coal supply sources, the proportion of overseas-imported coal will increase slightly which will gradually create a comparative pricing effect in the domestic coal market, thereby playing an active role in stabilising domestic coal prices.
Considering all the above factors as a whole, prices in the domestic coal market are expected to remain relatively stable in 2007, while market spot prices will fluctuate within a narrow range as a result of seasonal effects.
The Company signed its annual coal purchase contracts in early 2007. Total coal consumption this year is anticipated to reach around 60 million tonnes. Coal supply under the contracts accounts for 80% of the Company's annual coal demand. Coal prices increased by approximately 8%-10% year-on-year, largely refl ecting the slightly strained coal supply and transport capacity at the beginning of the year, as well as the result of the alignment of planned thermal coal prices under major contracts and under nonmajor contracts. China's ongoing implementation of the fuel-tariff pass-through mechanism will substantially mitigate the pressure from surging coal prices upon the Company's operations.
In 2007, the Company will adopt a variety of measures and strategies to guarantee coal fuel supply and price stability for the whole year. Apart from the assurance of the annual coal purchase contracts, Ta Shan Coal Mine in Shanxi invested in
by the Company has also obtained some production capacity. Its coal output, an exclusive supply to the Company, will effectively meet the fuel demand from the Company's power plants in the eastern coastal areas. Besides, as such power plants commenced operation in the second half of last year, the Company began to import at the same time some coal from overseas at competitive purchase prices so as to secure fuel supply for such power plants, effectively diversifying the risks associated with the domestic coal market.
|
| |
| Copyright © 2000-2005 Datang Power |
|
|
|
|
