China's coal exports have fallen by about 15 percent this year due to a drop in orders and the government's macro-controls to concentrate on domestic demand.

The country is expected to supply 74 million tons of coal products, including thermal coal, metallurgical coal and anthracite, to foreign countries by the end of 2005 - 6 million tons less than the government-set quota of 80 million tons. Last year it exported 87 million tons of coal to countries, including Japan and South Korea, to exceed the quota.

Industry authorities on Friday said this year's decrease is because of factors on both the domestic and international markets.

Some coal exporters did not honor their annual contracts with foreign buyers in 2004, in terms of both quality and quantity, damaging the reputation of domestic coal suppliers, said Hao Xiangbin, head of the research arm of the China Coal Industry Association (CCIA).

Coal prices from China are usually higher than those offered by the international producers, he said.

"For example, coal prices offered by Australian companies are about US$5 a ton lower than those of the Chinese companies," Hao explained. "So coal users from countries such as Japan and South Korea opt to choose more coal from other countries such as Australia, rather than China."

China exported 60.76 million tons of coal in the first 10 months of this year, down 15 percent on 2004, CCIA statistics show.

Sources from the country's biggest coal exporter, the China National Coal Group Corp, show the company had exported 31.2 million tons by Wednesday this week, about 6-7 million tons less than the same period last year.

However, Hao's views were challenged by other industry insiders, who pinpointed other reasons for the fall.

Wu Chenghou, executive director of the Coal Sale and Transportation Association of China, told China Daily on Friday that the country's incoherent export policy has discouraged foreign buyers, because they fear China would not secure them stable supplies.

From 2001-2002, China had a supply surplus in coal and the government encouraged coal exports. The country's coal exports increased by 60 million tons from 1998-2001, CCIA said.

But from 2003, as China's fast-growing economy guzzled more energy, the government limited coal exports by setting an annual quota of 80 million tons.

(China Daily December 10, 2005)