Coal miners and power companies break five month deadlock
Coal miners and power producers rose in Hong Kong after a five-month deadlock on annual coal supply talks between miners and power producers finally broke.
Coal shares rose after power producers led by Huadian and Huaneng agreed to purchase coal at a price 4 percent higher than the RMB 460 a metric ton paid last year. Power shares advanced on Hong Kong but declined on mainland markets.
China’s five biggest state power producers had rejected a 10 percent price increase sought by suppliers.
The fact that there has been a agreement removes a great deal of unknown risk for both sides and has been welcomed by analysts as a breakthrough.
China Shenhua Energy Co. (SH:601088;HK:1088), China's largest coal producer, advanced 3.01 percent on Hong Kong trading. Yanzhou Coal Mining Co. (SH:600188;HK:1171), the third-largest, added 5.85 percent on Hong Kong and 0.2 percent on Shanghai. Shanghai Datun Energy Resourses Co.(SH:500508) advanced 4.88 percent.
Huadian Power International Corp. (SH:600027;HK:1071), a Shandong-based power producer, rallied 11.98 percent on Hong Kong but retreated 2.01 percent on Shanghai. Beijing-based Huaneng Power International Inc. (SH:600011;HK:0902) gained 5.01 percenton Hong Kong but lost 1.42 percent on Shanghai. Datang International Power Generation Co. (SH:601991;HK:0991), China’s second-biggest electricity producer, rose 7.16 percent on Hong Kong but dropped 1.49 percent on Shanghai.
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