China's coal prices to remain high in 2006

Sydney, Mar 2, 2006 AEST (ABN Newswire) - KGI Securities has retained its Neutral stance on China's coal sector with the expectation prices will hover around high levels in 2006.

It said that due to the government policy of controlling small coalmines as well as the peak coal consumption season, pithead coal prices have been driven higher by 10 per cent since the end of last year.

Coal prices at trans-shipment points had also struck historical highs, underpinned by strong pithead prices, the broker noted.

Coal output slumped by 10 per cent year-on-year in January to 140 million metric tons, according to China's State Administration of Coal Mine Safety.