Chinese power plants refuse coal from spot market

China's thermal coal prices posted its first fall in three weeks and stockpiles at the key port rose.

This happened even as a growing number of provinces have begun to ration power because of dwindling coal stocks at power plants. The anomaly was caused by many power companies refusing buy more coal in the spot market because of the recent surge in prices.

Coal with calorific value of 6,000 kcal/kgfell by US$0.75 from a week ago to hover in the range of US$125 to US$127 per tonne in the week to December 24. Prices have fallen US$3 from the end of November, when they rose to their highest in two years.

Coal with a heating value of 5,500 kcal/kg also eased to between US$117 –US$118.79 while coal stocks at Qinhuangdao rose to 7.59 million tonnes, its highest in at least two months, it noted.

Spot prices are too high. Fuel costs keep increasing but power prices haven't changed. It doesn't make sense for them to keep buying stock because every tonne that they buy, They'd be making a loss, said a manager at a utility in Hubei province.

Earlier in Dec, an official from the China Electricity Council told local media that China's five state-owned power firms such as China Huaneng Group and Datang Corp, were easily running at 50 percent losses this year due to high coal prices.