China Domestic Coal Squabble Opens Door to Imports


"Asking for a price rise as the dust is still clearing on the biggest commodity price collapse in history may not be the coal miners' best-timed move."

A months-long dispute between Chinese coal miners and power generators over annual prices has unexpectedly opened the door to rising imports, despite lackluster demand and a supply glut.

Talks on an annual coal price deal for China's top five power producers - Huaneng, Datang, Guodian, Huadian and China Power Investment Corporation - have dragged on for almost two months without agreement, dissolving recently into a war of words.

The coal miners, led by industry giant Shenhua Group, want to raise prices by over 10% from last year, arguing that tax costs have gone up and term prices were anyway always too low. The power firms firmly oppose a hike from last year's term price, which analysts put at about 460 yuan ($67.30) per tonne.

In an apparent effort to step up pressure on the miners to agree to lower prices, generators have been buying up more and more coal abroad, lifting total imports last month by 12% from December, a second increase after November's multi-year low.

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