May 27, 2006	Saturday	Rabi-us-Sani 28, 1427

BEIJING, May 26: China’s domestic spot thermal coal prices will stabilise at high levels this year due to increasing production costs, which are likely to further cap exports, an industry association said on Friday.

China slashed coal exports and boosted imports last year to meet strong domestic demand in the world’s largest user, fuelling a global price rally.

Stubbornly high Chinese coal prices also piled pressure on the country’s power generators, which have been anticipating the government increase of partly administered prices soon.

Coal is the main fuel in China, the world’s second largest power market.

There is no channel for prices to head down as costs are increasing, Wu Chenghou, executive director of The China Coal Sales and Transportration Association, told reporters.

Exports are likely to be lower, he said, without giving an estimate.—Reuters