A Study On The Forming Factors Of Price Advantage Of Imported Coal In China

Due to the unbalanced nature of the distribution of the world’s coal resources, coal trading shows a strong regional characteristic. The world’s coal resources are mainly distributed in the United States, China, Australia, Russia, Indonesia, South Africa and other countries. Coal demand countries are mainly the United States, European Union, India, Japan, Korea, China and other countries. After the international financial crisis, coal supply and demand conditions have changed, the main coal demand countries are Japan, Korea, China and other countries. Since 2009 China has become a net coal importer, and totally coal imports showed the rising trend. Due to the price advantage of foreign coal resources and the endowments of China’s coal resource, China’s imported coal are mainly coal, brown coal, coking coal and anthracite-based, among those coal and coking coal are the major thermal import coal. However, different types of coal has a different source, where Indonesia and Australia are the main source of coal, and Indonesia is the main source of imported lignite, and the main source of coking coal are from Australia and Mongolia, and such as North Korea and Mongolia are the main source of anthracite. Influenced by geographical factors, China’s coal imports mainly formed three areas: South China, East China and Northern China. With the fall of the price of domestic coal, imported coal prices also fall in line. However, the price of imported coal is always less than the price of domestic coal, and the reasons behind the phenomenon are worth pondering, and this also contributed to the cause of this paper.International coal prices are mainly influenced by the world supply and demand. From the point of view of the coal supply factors, which was affected by the international financial crisis, and the world economic is undergoing the sluggish growth, and thereby the sluggish growth has resulted in a significantly drop in major coal demand countries, which also affects the coal supply situation. Due to reduced demand for coal the world’s major coal supply countries have to seek new markets, and so that Asian has become a concentrated coal supply center, which leads to the formation of world coal oversupply situation. From the aspect of coal demand, due to the impact caused by the US shale gas revolution, the coal demand of the United States is also declining. Other major coal demand countries such as the EU, Japan, South Korea and China’s coal demand are also declining, which has changed the pattern of coal supply and demand, and this also leads to oversupply of the world’s coal supply as a whole, so world coal prices falls. The reason why the price of imported coal has the advantage is the result of many factors, including the cost of production factors, labor productivity factors, the transportation cost factors, taxes and exchange rate factors and the trading process factors. Among them, the cost of production and resource endowments are the main reasons to explain why the major coal-producing countries have the low cost, the advantage of coal transportation cost is an important factor. At the same time, higher labor productivity, lower taxes and other reasons can also explain how the price advantage of imported coal is formed. In addition, the recent appreciation of the RMB to some extent also can lead to the imported coal relatively cheap, and lastly less imported coal trading links, can reduce the layers in coal trade.