Chinese producers have cut thermal coal shipments to South Korean and Japanese power utilities on tight supply and high domestic prices, a move likely to spur price gains in an already tight Asian market.
The news follows data Monday showing Chinese coal exports fell by nearly half in January from the previous month, raising fears the country's voracious appetite for energy will turn it into a net coal importer this year.
Record prices at home and the ending of an 8 percent export tax rebate have led China - the world's top coal producer and consumer - to keep more for the domestic market and raise export prices to about US$67 (HK$522.60) a tonne, from US$54 in the fourth quarter.
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Three Chinese coal producers including China Coal Energy (1898) and Shanxi Coal Import and Export Group have cut spot coal exports to Japanese buyers by up to two-thirds since December, according to a Japanese buyer.
"We are trying to execute all contracts," a Shanxi source said.
"The export volume for the company in 2007 is expected to be lower than 2006 as domestic coal prices are likely to rise further."
China Coal has also cut its long-term supply of Yanzhou coal to 16 Japanese utilities and traders, buyers said, one adding the term cut was across the board between 10 to 30 percent from contracted volumes for the year ending next month.
"[Korea's] Southern Power hasn't received coal supplies from China Coal and Shanxi since about December last year," a Korean utility source said. "The volume of delayed supplies is about 180,000 tonnes each."
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