The coal industry is expected to fall short of demand in 2005,
with some areas possibly being hit by striking shortfalls despite
robust growth in production.
The prediction was made at the ongoing weeklong Coal Ordering
Conference in Qinhuangdao, in ?Hebei
Province, which started last Thursday.
The conference attributed the expected shortfalls to soaring
demand, inadequate production capacity and transportation.
The largest will be concentrated in the east and south of the
country, said Han Yong, a coal industry analyst with Shanghai-based
China Securities.
In eastern China only a small number of areas, including
Anhui?and Shandong provinces, produce coal, Han said, while
regions like Shanghai, as well as Jiangsu and Zhejiang provinces
yield little, but are amongst the largest consumers nationwide.
2.05 billion tons is expected to be produced this year, enough
to meet basic needs. Yet inadequate transportation will bottleneck
the country's market balance, said an industry insider from China
Coal and Coke Holding Ltd.
In an effort to relieve the situation, the government is
planning to further expand transportation routes from coal-rich
regions, including Shanxi and Shaanxi provinces and the western
area of Inner Mongolia Autonomous Region, and improve
transportation facilities at ports such as Qinhuangdao, according
to official sources.
Han told
China Daily the country is expected to improve
transportation capacity of the railway between Datong in Shanxi and
Qinhuangdao in Hebei from 2004's 150 million tons to 200 million
tons this year.
In order to increase production, the National Development and
Reform Commission (NDRC) aims to further improve performance by
shutting down coal mines that do not meet basic production
conditions, and by regulating new mines and power plant
construction.
The country is expected to speed up work on existing large coal
mines and fortify producers' technical strengths this year, said
Han Yong.
"Large coal mines boast 70 to 80 percent efficiency in coal
production, compared with the small producers' roughly 20 percent,"
said Han, so the elimination of small mine construction projects
would not have a major impact on the country's coal supply.
The NDRC is also attempting to streamline supply and demand
information sharing. The coal industry association, power
generation units, and transportation sections will be required to
provide detailed production information.
Han said the government is attempting, with this move, to
promote market regulation, further signaling the establishment of a
nationwide coal exchange center to replace the annual coal ordering
conference.
Five areas - power generation, fertilizer production, steel
production, individual consumers and exports - will be given
priority, said an official statement, in order to guarantee stable
economic development.
The weeklong conference, also stressed the importance of
restricting disordered construction in high energy consuming
industries, including steel, cement, and power generation, in
reducing irrational demand.
Last year, the central government took steps to rein in
construction in sectors including steel and power generation, and
the endeavor is expected to continue this year, experts say, with
an aim to ensure an optimized economic structure and a balanced
energy supply and demand.
(China Daily January 4, 2005)
