Coal price

The country's five biggest power-generating companies, including China Huaneng Group, China Datang Corp, China Guodian Corp, China Huadian Corp and China Power Investment Corp, had sought a 50-yuan per ton price cut from the term prices in 2008.

But, coal companies wanted to increase term prices by 4 percent in 2009 to pass along their higher taxes and other rising costs.

Coal companies were set to sell 840 million tons to power producers at the annual conference. Consequently, only about half of the coal offered by the miners was sold.

Analysts said previously China's power generators are not unduly worried over fuel supplies next year as they have adequate coal stocks and the railway capacity is abundant.

But now, the conflict between Chinese coal miners and power generators is becoming even more complicated.

Recently, the coal supply of Beijing Huaneng Thermal Power Plant was cut by its supplier, Shenhua Group, and the supply then resumed after government intervention, according to a report by the National Business Daily.

But the Huaneng plant wasn't the only one hurting for coal; similar situations have been reported at other thermal plants.

An official from a power plant in Hebei province said their coal stockpile has declined and only can sustain 10-day production.

He added that many Chinese power plants have similar stockpiles.

According to statistics, coal stockpile at Qinghuangdao port declined to 5 million tons on Jan 6, a 45.2 percent decrease compared to the peak of 9.2 million tons on Nov 16, 2008.

It caused an immediate price rise. At Qinghuangdao port, price of 5500-kilocalorie quality coal from Shanxi province reached 580 to 610 yuan onof Jan 9, a 20-yuan decrease compared to previous week.

Some industry insiders said as coal stockpiles keep declining, the five electricity giants might compromise and sign the contracts.

However, an official from one of five leading power generators told the National Business Daily, if they don't have coal in storage, they can choose to shut down their power-generation units because it is also difficult to sell electricity now.

In China, there are strong ties between coal miners and power generators. Over 60 percent of power generation capacity belongs to coal-fired plants and also power generators are the largest coal consumers, accounting for over 50 percent of the country's coal sale.