Singapore (Platts)--20Jul2012/540 am EDT/940 GMT

The Chinese coal market is expected to remain oversupplied in the second half of 2012 due to weak demand coupled with rapid growth in supply, an official from the China National Coal Association told reporters on Wednesday.

CNCA Deputy President Jiang Zhimin was pessimistic about the outlook for the rest of 2012 saying that it was difficult to estimate how long the downward spiral would continue.

China's domestic coal production had risen by more than 100 million mt or 5.6% to 1.91 billion mt in the first half of 2012 compared with H1 2011, while net imports also jumped by 58.54 million mt or 77.5% to 134.08 million mt, he pointed out.

China's coal imports surged 65.9% to 139.85 million mt in H1 while exports fell 34.1% to 5.77 million mt, according to CNCA data.

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As much as 1.17 billion mt of coal was carried from mines by railway in H1, up 4.5% from a year earlier, while 312 million mt were transported on ships, down 4.1% from H1 2011, the data showed.

Meanwhile, China consumed 1.97 billion mt of coal in H1 2012, only 2.8% more than in H1 2011. The growth rate was 6.6 percentage points lower than in the same period in 2011, Jiang said.

The power sector accounted for 990 million mt of coal consumption in H1, up 2.7% from a year ago, while the steel sector saw a 2% rise to 250 million mt, he added.

Consumption of steam coal fell by 20 million mt in H1 compared with a year earlier as hydropower accounted for most of the demand for electricity in the country, Jiang explained.

--Staff, newsdesk@platts.com
--Edited by E Shailaja Nair, shailaja_nair@platts.com

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