SHANGHAI (Interfax-China) -- Local prices for raw coal for power generation have remained stable in the week following the devastating earthquake that hit southwestern China's Sichuan Province, an analyst told Interfax today.
Ex-factory prices for raw coal in Sichuan have stayed around RMB 400 ($52.14) per tonne, the same level as that recorded on May 5, according to information released by domestic coal pricing portal meitanwang.com.
"The earthquake will have a very limited impact on the country's coal market, as Sichuan is a relatively small coal exporter," said Li Chaolin, a coal analyst with the China Coal Trade and Development Association.
Sichuan accounts for only 3.8% of national coal output. The province produced 95.58 million tonnes of raw coal last year, which is mainly sourced from small-scale coalmines, according to Li.
Some 199 coalmines with a combined annual capacity of 14.5 million tonnes were affected by the earthquake. The production capacity immediately shut down by the quake accounted for only 0.2% of the country's total, the National Development and Reform Commission said.
The nation's two major coal producing provinces of Shanxi and Shaanxi are quite close to Sichuan, but as their raw coal resources are located mostly in their northern regions, only coking coal production in southwestern Shanxi is likely to be affected, according to a research report compiled by Changjiang Securities.
The latest information from the State Electricity Regulatory Commission shows that, as of May 17, thermal power plants in Sichuan with a combined capacity of 10,590 megawatts had coal stockpiles of 1.07 million tonnes, enough to support power generation for around seven days. However, among these plants listed, two had no coal stockpiles and seven others had stockpiles insufficient for seven days of power generation.
Coal supplies in Sichuan Province have been tight this year. Stable coal prices so far don't mean that there has not been and will not be a shortage, as prices in the region may well be capped amid reconstruction efforts following the earthquake.
The power capacity lost among the province's damaged hydropower projects remains unclear. When the peak summer consumption season comes and industrial production in the region resumes, there thermal power plants will be under heavy pressure to generate electricity, which could lead to higher coal prices.
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