China's coal imports decline by 42 percent

Imports are at a price disadvantage compared with domestic mineral, while domestic firms struggle with overcapacity and falling usage

The nation's coal imports declined by 41.5 percent to 49.07 million metric tons during the first three months of the year compared with the same period in 2014, as downstream demand weakened further, customs data said on April 13.

The nation imported 17.03 million tons of coal in March, 8.26 million tons less than the amount it imported in March 2014, a 32.6 percent decline.

Imported coal products have not found many takers in China as they do not have any significant advantages over the low-priced domestic products, says an unidentified source at a power station in southern Fujian province.

He says that power stations and other users will import less coal in the future.

Deng Shun, a coal analyst with ICIS Energy, a Shanghai-based energy information consultancy, says China may import less than 200 million tons of coal for the whole of this year if domestic coal prices stay low and demand continues to remain weak.

In 2014, China imported 291 million tons of coal, 10.9 percent less than it did in 2013.

"China's coal industry is suffering from losses and a weak market due to the nation's economic slowdown," says Jiang Zhimin, vice-chairman of the China Coal Industry Association.

He said on April 10 that up to 80 percent of the country's large-scale coal companies were in the red for the first two months.

According to statistics from the association, about 90 major domestic coal companies had a total deficit of 13.1 billion yuan ($2.11 billion) in the first two months.

During the same period last year, these companies had made a profit of 11.2 billion yuan.

"China's coal industry is facing more difficulties this year," Jiang says.

During the first quarter, China produced 850 million tons of coal, a 3.5 percent decline compared with the same period last year, according to the association.

Although coal output and imports declined in the first quarter, China's coal inventory is still relatively high. Official data show that the national coal inventory has been above 300 million tons for 39 months in a row.

"Overcapacity has also added to the difficulties for the coal industry," Jiang says.

"China's national coal production capacity is more than 4 billion tons and another 1 billion capacity is being built.

"Meanwhile, consumption of clean energy and other substitutes for coal is increasing, which also leads to less coal use."

He says the glut in China's coal industry will remain for a long time, which means companies still have huge pressure to stay profitable.

"The export market is not rosy, either. The international coal market is saddled with excessive supplies for the moment," he says.

dujuan@chinadaily.com.cn