AT least two domestic coal producers have cut thermal coal shipments to South Korean power utilities due to short supply and high domestic prices, sources said yesterday.

China Coal Energy Co. and Shanxi Coal Import & Export Group Co. have not sent any coal to South Korea since December, a move expected to significantly tighten the Asian thermal coal market.

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 a ton, from US$54 in the fourth quarter.

“Southern Power hasn’t received coal supplies from China Coal and Shanxi since about December last year,” a South Korean utility source said.

“(China Coal and Shanxi) cite shortage of supplies as the reason. The volume of delayed supplies is about 180,000 tons each.”

China Coal is the second-largest coal producer in China after Shenhua Energy Corp. Shanxi Coal is a domestic agency which has government permits to manage coal imports and exports for the country.

Korea Midland Power, which has contracted 500,000 tons of thermal coal a year from China Coal, has seen 60,000 tons of January supplies delayed, another source said.

China’s voracious appetite for coal to fuel its booming power demand has pushed benchmark spot thermal coal prices on the global COAL NEWC index up from the average price of US$30 per ton seen in late 2005 to about US$51 in January.

(SD-Agencies)