China faces an excess supply of coal in the short term, as demand ebbs with the end of the heating season and as small mines gradually return to production, an industry group executive said on Monday.
"Output in the power sector and steel industry is staying weak," Wang Xianzheng, president of the China National Coal Association, told a Coaltrans conference.
"Coal demand falls as heating demand in the north ends, as small coal mines are returning gradually to production," he said.
Wang warned that supply could be boosted further in the next two to three years as production capacity from investments made in previous years comes on stream. From 2004-2008, fixed asset investment in the coal industry mounted to $98bn, he said.
But Wang said that China's coal supply would be tight over the long run, given the dominant status of coal in the country's energy mix.
"In the short term, there will be oversupply. But in the long run, shortage in supply will remain an important problem," he said.
Wang also forecast that China's coal demand would exceed three billion tonnes in 2010.
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