Bloomberg reported that power station coal in China fell to a four-year low as industrial demand declined amid evidence the economy is slowing.
Coal with an energy value of 5,500 kilocalories a kilogram at Qinhuangdao, the country’s biggest shipping port for the fuel, slid to a range of CNY 560 (USD 91.34) to CNY 575 a metric tonne as of yesterday, the China Coal Transport and Distribution Association reported today. That’s the lowest since July 27, 2009.
A preliminary index of manufacturing from HSBC Holdings Plc and Markit Economics last week trailed estimates and would be the lowest in 11 months if confirmed in the final report on Aug. 1. The economy is forecast to advance by a median 7.5% this year, according to 55 economists surveyed by Bloomberg this month. Last month’s projection was 7.7%.
Helen Lau, a Hong Kong based analyst at UOB-Kay Hian Ltd said that “We see weak demand from industrial users in the first half-year, especially from heavy industrial sectors, who are major coal users. As the economy further weakens, we expect coal prices could go as down as CNY 550 a tonne for the second half year.”
Source – Bloomberg