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Shenhua may resume coal exports to Japan

China’s coal giant Shenhua Group hoped to expand coal exports and gradually resume exports to Japan, amid fluctuations in international coal market and persisting sluggishness in domestic market

Invited by Shenhua, delegates from Japan’s major power companies including Tohoku Electric Power visited the group’s mining areas and power plants in late August, seeking ways to enhance further cooperation, Shenhua said on its website in early September.

Han Jianguo, vice president of the Group, said Shenhua has always attached great attention to the exports to Japan, and hopes to resume coal exports to the Japanese market steadily, against the backdrop of new economic and coal trades situations.

The delegates fully affirmed the stable coal quality, safe supply of Shenhua, and they were willing to further build partnership with the group.

In late August, two South Korea-based traders said Shenhua had dispatched a delegation to South Korea in mid-August to meet traders and power utilities. Shenhua offered thermal coal with 5,800 Kcal/kg NAR and 0.3% sulfur from Yujialiang mine in Shaanxi province at $80/t (513 yuan/t) FOB, inclusive of export tax.

However, some South Korean utilities were bidding this variety at $54/t FOB, far lower than the offered price.

China Shenhua, a listed company of Shenhua Group, exported 600,000 tonnes of coal or 0.3% of the total sales in the first half of the year, down 33.3% on year. The export price averaged 467.9 yuan/t, falling 18.2% from the year prior.

Trade sources said Shenhua started preliminary talks to export coal to South Korean and Japanese utilities back in April. Meanwhile, Shenhua is lobbying with the Chinese government to further lower the export tax or completely exempt the company from paying the tax to allow them to be more competitive in the market.

China lowered its export tax from 10% to 3% in January this year.

Chubu Electric Power and Tokyo Electric Power, which founded a joint venture in April this year, planned to finish the integration of energy transport and trading business into the new company before October 1.

Presently, the new company is focusing on integrating thermal coal and other energy purchasing across the globe, with annual thermal coal imports at 85 million tonnes.

source: http://en.sxcoal.com