Coal waterway shipping fees with Shenhua to spike 62 pct this year -Ningbo Marine
Ningbo Marine Co. will raise this year’s domestic coal waterway shipping fees of China Shenhua Energy, the country’s largest coal producer, by 62 percent when compared to last year, after both parties inked a new coal delivery contract at the beginning of the month, Ningbo Marine announced today.
According to the deal, Shenhua Energy will hire five of Ningbo Marine’s vessels, two 65,000-deadweight ton ships, two 40,000-ton ships and one 27,000-ton ship, to deliver coal from northern Chinese ports to power plants in the southern and eastern provinces of Guangdong, Jiangsu and Zhejiang.
Revenue from the Shenhua deal is expected to go up 96 percent this year, compared to RMB 250 million ($34.72 million) in 2007, as part of rises that are forecast for its total coal shipping business, Ningbo Marine said.
A report released by the National Development and Reform Commission last year regarding the country’s coal industry said the country’s coal transportation capacity will increase by only 60 million tons this year, significantly less than last year. The low increase is expected to lead to increasingly severe transportation bottlenecks between consumers and key coal producing regions such as Shanxi Province, Shaanxi Province and the Ningxia Hui Autonomous Region.
As a result, the country’s coal shipping sector will expand rapidly this year, as coal suppliers and consumers look for additional ways to transport coal, Hao Xiangbin, an analyst with the China Coal Trade Association’s information center, previously told Interfax. This is expected to lead to a coal trade boom in waterway-linked cities.
China Coal, the country’s second largest coal producer, said last month that coal transportation costs rose 20.99 percent each year between 2004 and 2006 due to a higher percentage of coal sales through waterways, which meant higher transportation costs.
For example, China Coal had to transport coal produced from the Pingshuo region that left Qinghuang port by waterway to Shanghai and other eastern China regions. Coal produced in Pingshuo accounted for 83.32 percent of the company’s total output, compared to 76.01 percent in 2004. The percentage of transportation through waterways is likely to spike even more this year, the company said.
Tags: coal, Shenhua