Erik Dahl

http://www.interfax.cn

1 Comment

    • ON: Tue Apr 22nd 02:28 AM
      Commented on:
      The Impact of the Beijing Olympics on Commodities Prices
      Shutting down 7 power plants won't have any impact on China's domestic coal markets, let alone world markets, even if the 942,000 ton figure is to be believed. Domestic coal output reached 2.73 billion (yes, billion) tons last year, or about 942,000 tons of coal every 3 hours.

      Even if demand did fall by 942,000 tons, and it led to a direct reduction of import volume, it will be more than offset by reduced coal export volume this year. Last year, China exported 53.17 million tons of coal, compared with imports of 51.02 million tons. However, due to growing concerns over the possibility of domestic shortages, the government slashed coal export quotas by 24% in March to safeguard domestic supplies, which will tighten spot markets in Asia and support price growth.

      The real story is the potential for China to put upward pressure on coal prices both by reducing exports and the possibility it could become a net coal importer as early as this year. High international prices caused imports to fall 18.2% year-on-year in the first two months to only 7 million tons, but if the decline is projected out over the rest of the year, it would make China a small net coal importer this year.

      Other factors, like the potential for a domestic coal production surplus, and the impact of slowing economic growth could still affect import growth. However, China will put upward pressure on coal prices this year, Olympics or no.

      Finally, your power generation figure, which went from 25.6 mWh to "25.6 BILLION mWh" is still completely off. Given the fact that China's total power output last year was 3.26 billion megawatt hours, you might want to take another stab at it.
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