COAL prices in China are falling as winter nears, offering relief to power plants that buy the fuel and reducing the chances of another round of debilitating power crunches.

Record domestic production and imports, and an increasing contribution from renewables, have put the country in a much better place to weather rising power consumption during the peak demand period for heating.

Persistently strong coal inventories and a recovery in hydropower generation have helped eliminate the key factors behind last year’s crippling surge in prices.

Ample supply of coal, China’s mainstay fuel, is good news for industry as the country’s economy improves after months of poor performance.

Electricity generators are also benefiting from weaker prices.

By contrast, coal mining profits are declining.

Power plants have now largely completed replenishing stockpiles ahead of winter and benchmark prices have dropped below 1,000 yuan (US$136.60) a ton, according to the China Coal Transport and Distribution Association. The downtrend could last for another month. (SD-Agencies)