China's top power firms suffer soaring losses

HONG KONG, June 24 (Yonhap) -- China's top five power companies saw their losses in the first five months of this year jump from a year earlier due to rising coal prices, an industry report showed Friday.
The China Electricity Council said in the report that the country's five major state-owned power-generating firms lost a total of 12.16 billion yuan (US$1.88 billion) in this year's January-May period, compared to 4.3 billion yuan in losses during the same period last year.
The five power generators are China Huaneng Group, China Datang Corp., China Guodian Corp., China Huadian Corp. and China Power Investment Corp.
The council said they lost 1.69 billion yuan in May alone.
The jump in losses was attributed mainly to soaring prices of coal, which fuels nearly 80 percent of the power output in the world's second-largest electricity producer after the United States.
China's coal-fired power generators cannot afford to buy expensive coal and to provide electricity at the government-fixed price.
While China started to raise prices of electricity on June 1 in its efforts to better reflect market demand, coal prices also increased substantially following the government's move.
According to China's online coal-trading Web site (www.coal.com.cn), the prices of thermal coal at the northeastern port city of Qinhuangdao rose 75 yuan a ton to 840 yuan from early April to June.
Industry watchers say every coal price increase of 25 yuan a ton offsets a 0.01 yuan rise in the electricity price.
ygkim@yna.co.kr