Coal miners in the north of China have
agreed with Japanese buyers on a 2007
price hike of about 28% for thermal coal,
while other suppliers have unprecedentedly
refused to join the deal, Shenzhen
Daily reported. Due to strong demand in
China, which has pushed up domestic
prices to historic highs, domestic miners
are reluctant to sell much of the fuel
abroad, especially as the government has
scrapped tax rebates in an effort to keep
more of the resource at home. During
may, the China Coal Trading Association
said the suppliers had settled prices for
2007 at $67.90/ton, free-on-board
(FOB) basis. The price was about 28%
higher than the $53 agreed between
China and Japan last year, and well above
the settlement price of $56 agreed
between Australian coal producers and
Japanese utilities this year. The gap
between the Chinese and Australian
prices reflects in part the difference in
freight costs, which have surged to record
highs this year due to China’s voracious
demand for iron ore.
But industry officials said some miners
in Shandong, such as Yanzhou Coal
Mining Co., had rejected the agreement,
asking for prices above $80/ton, FOB.
Yanzhou said it would cut by half exports
in 2007 to 3 million metric tons
due to higher domestic prices. So far
this year, China has emerged a net coal
importer for the first time in history,
with exports falling 28.6% to 16 million
mt in the first four months, while
imports jumped 50.4% to 19 million mt
during the period.