China's economy has continued to grow at a high rate over the past 5 years. National coal production has increased at an average annual rate of 11%, and coal consumption in the three major coal-consuming industries of power, metallurgy and building materials has grown even faster. Especially in the electric power industry, since 2005, the country has added 294 million kilowatts of new installed capacity, of which 242 million kilowatts of thermal power installed capacity, a corresponding increase in coal consumption of more than 700 million tons, last year's electric power coal consumption reached 1.43 billion tons. During the same period, metallurgical coal consumption increased from 230 million tons to 420 million tons, building materials coal consumption increased from 290 million tons to 350 million tons. 2008 first half, thermal power installed capacity increased by 12.7%, steel increased by 12.5%, cement increased by 8.7%, the coal chemical industry is an unprecedented rapid development of the trend of the coal-based industry chain is rapidly expanding the extension of the expansion. China's coal crisis is beginning to take shape in the rising price of coal and the shortage of electric coal.
Chinese coal prices have also risen sharply. Starting from the fourth quarter of 2003, the price of Datong Premium Blend Coal has risen from around RMB 270/tonne, and as of July 21, 2008, it reached RMB 1,065/tonne. Due to the substitutability between coal and oil, the increase in international oil prices will push up the price of coal. Even if China is basically self-sufficient in coal, the rise in international coal prices will at least aggravate the expectation of rising domestic coal prices. Price movements in international energy markets basically reflect global energy supply and demand. China and India are representatives of emerging economies, both are populous countries, primary energy consumption are coal-based, coupled with the rapid growth of the economy, all factors are a strong support for the future demand for coal. In contrast to the increasing demand, the non-renewable nature of coal resources, coal market prices will also be strongly supported in the future supply and demand imbalance is expected.
Some experts believe that the value of China's coal resources has been underestimated for a long time, but after the price rise in recent years, the undervaluation situation has been improved, the first half of this year, the short-term rapid emergence of the speculative factors dominate, so that analysis, even if it has its own rationality, can not expect a short-term sharp downward trend. If coal demand remains at the current rate of growth, taking into account the upcoming resource tax and environmental taxes, coal prices continue to move upward is very likely.
Theoretically, coal will not run out, and the scarcity of coal resources will be reflected in prices, which will rise until effective energy substitution occurs. According to China's current energy consumption structure, a sharp rise in coal prices would have a substantial impact on China's economy. In turn, once China has a shortage of coal and needs to import large quantities, it will have a significant impact on international coal prices, as China's coal consumption has accounted for as much as 40% of the global total. So, what is the impact of long-term coal price increase on China's economic operation in the future, and what is the impact of short-term energy price policy on China's long-term energy strategy? This is a question of energy strategy and policy, as well as the sustainable development of China's economy.
If low-priced coal is now exported in large quantities through steel and other energy-consuming products, and then bought back at several times the high price when coal is in short supply, are we not working hard for others for nothing? The lesson that oil has taught us so far should be learned. The future international coal market is not optimistic, India is also a country whose energy consumption is dominated by coal, and its economy is growing at a rate of 8%, and it will soon enter a phase of high energy demand. By 2020, the U.S. may still have a lot of coal, but at what price will it be sold to you? If a coal shortage does occur, what kind of threat to China's energy security will there be