Qinhuangdao Port plans large expansion
By Wing-Gar Cheng and Loretta Ng (China Daily)
Updated: 2005-11-04 06:18

Qinhuangdao Port Group, which manages China's largest coal port, will expand capacity by 45 per cent in the first quarter of next year to meet increasing demand.

The harbour is adding six berthing terminals to boost its annual handling capacity to 209 million metric tons, Zhao Ke, deputy general manager of Qinhuangdao, said in an interview in Beijing.

The port, located in Hebei Province, now handles as much as 144 million tons, much of which is shipped to Chinese power producers further south.

China's economic growth has spurred demand for commodities such as coal, oil and iron ore, and has increased exports of electronics, toys and other goods. Last year's transportation bottleneck at ports and on the nation's rail network pushed coal prices to record levels in the first quarter of this year.

"China's coal demand is strong," Zhao said. "We must add capacity now to allow us to handle the demand growth over the next five years."

Demand for coal strained the capacity of rail and port networks for suppliers such as China, Australia and South Africa last year. This prompted additional investment.

South Africa's Richards Bay Coal Terminal Co said on Wednesday that it plans to spend 1 billion rand (US$150 million) to increase capacity by at least 28 per cent, which will make it the world's biggest coal export port. Richards Bay will increase the amount of coal it can ship a year to 92 million tons by July 2008, from 72 million tons.

China's total coal exports may reach 60 million tons this year, Pan Wanze, deputy managing director of China Coal Import & Export Co, said.

China is the world's biggest coal producer and consumer, and also the third-biggest coal exporter.

The government is expanding the coal-carrying capacity of the main coal railway line linking Shanxi, the nation's biggest coal producing province, with Qinhuangdao and Tianjin, Zhao said. Work on expanding the railway, known as the Daqin line, may start in 2006, boosting capacity to as much as 250 million tons a year from 200 million tons now, he said.

"The expansion plan may be fine tuned at a later stage as the growth estimate may be a bit too aggressive," Zhao said.

China Ocean Shipping (Group) Co, China's biggest shipping company, expects 400 billion yuan (US$49 billion) of spending on ports over the next five years as the industry tackles bottlenecks created by the nation's unprecedented economic boom.

"We need to upgrade the capability of maritime services," Wei Jiafu, China Ocean's chief executive said on Monday. Too few berths and cranes "will lead to more congestion."

Coal producers have benefited from a surge in demand. China's economy expanded 9.4 per cent in the third quarter of this year, spurring consumption of coal, used to generate two-thirds of the nation's power. Power shortages affected China's largest cities and 18 of its 27 provinces during the summer.

Power consumption in China, the world's largest electricity generator after the US, may rise 11 per cent to 2.73 billion megawatt-hours next year, China Electricity Council said on October 31.

(China Daily 11/04/2005 page10)