Mar. 8 (Platts) -- China's domestic thermal coal prices are not likely to rebound significantly this year, with the weakness seen late last year expected to persist, state media reported Thursday citing the deputy general manager of Shandong Energy Group, Kong Qing.
Speaking at the annual meeting of the National People's Congress in Beijing Wednesday, Kong said: "Should China's national economy continue the current slackness in the remaining months of 2012, China's national coal demand looks set to remain weak."
The weekly reference FOB price of 5,500 kcal/kg thermal coal NAR was reported by Qinhuangdao Port at Yuan 760-770/mt ($120.30-121.90/mt, or $102.80-104.20/mt without 17% VAT) Wednesday, Platts reported previously. While this was unchanged from a week ago, prices have been on a downtrend since the middle of November 2011 when prices stood at about Yuan 850-860/mt.
A purchasing executive at a utility in East China agreed Thursday, pointing out that the central government had cut its 2012 economic growth target to 7.5% -- following GDP growth of 9.2% last year and 10.4% in 2010 -- which could result in curbs on industrial development, and a slowdown in electricity and coal demand.
Shandong Energy Group -- the largest coal miner in eastern China's Shandong province -- was set up in March 2011 following the merger of six local coal mining companies in the province.
Kong said the merger company mined 108.2 million mt of coal in 2011, up from combined coal output of 83 million mt from the six local miners in 2010. Shandong Energy Group plans to increase its annual coal output to 120 million mt in 2012, he said. The company is planning to begin developing a 26 million mt/year coal mine, for captive use, in Canada's British Colombia, he said, adding that it is also in talks to acquire coal mines in countries such as Australia, Burma, and Cambodia.