This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China's Coal Price Influence Could Fall

China's Coal Price Influence Could Fall

China's insatiable demand for coal has given the industrializing country a significant role in shaping global seaborne thermal coal prices. But producer nations like Indonesia are eager to change that.

China currently consumes about half the world's coal, and uses that coal to supply its residents with more than 90 quadrillion BTUs of energy, according to a US Energy Information Administration (EIA)  report. Further, almost 80 percent of the electricity produced in China comes from thermal coal, a figure that is set to double by 2035.

Additionally, despite its huge contribution to global production numbers — 3.8 billion short tons in 2011 — China remains a net importer of thermal coal, the EIA report also notes. China's principal source of seaborne thermal coal is Indonesia, the world's largest thermal coal exporter; the vast majority of this coal comes from the Indonesian coal-producing province of East Kalimantan.

China's impact on this market should not be understated. Indonesia exports just over 200 million tonnes (Mt) of thermal coal annually, and the majority of that amount is consumed by China.

However, recent slowdowns in China's economy, coupled with strong stockpiles, have left Indonesian producers hurting, both in terms of prices and sales.

In September of last year, the Indonesian Coal Mining Association cut its 2012 production forecast to between 340 and 350 Mt. Exports to China, while up 15 percent on the year, fell in the same month by 16 percent compared to the previous year, Reuters reported.

“When market conditions weakened earlier this year, Chinese coal buyers forced Indonesian suppliers to reduce their contracted coal prices by very large amounts,” Roleva Energy's managing director, Bart Lucarelli, told Bloomberg recently.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.24 1.30%
FB $99.80 -4.10%
GOOG $683.10 -0.07%
TSLA $148.02 -9.00%
YHOO $27.05 -3.30%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs