Reuters reported that Chubu Electric Power, Japan' s No 3 power utility, wants to expand its coal trading business to other utilities in Asia and is pursuing sales to new power plants in countries such as Vietnam and Thailand.

Chubu's plan marks the first time a Japanese utility is adopting a strategy of looking overseas to trade coal, breaking ranks with a notoriously conservative group that usually prefers to buy through long-term contracts.

Chubu set up a coal trading unit, Chubu Energy Trading, with France's EDF in December 2007, which was responsible for buying half of Chubu's annual coal consumption through the spot market when it first began operations.

But the unit's annual trading volume has doubled to 11 million tonnes, accounting for Chubu's yearly consumption of 10 million, with another 1 million sold to Japanese industry, independent power plants and some South Korean utilities.

Mr Yuji Kakimi CEO of CET said “We are eager to expand our third party business and start selling to other Asian power plants. We are pursuing opportunities to supply delivered coal to new independent power plants planned in countries such as Vietnam and Thailand.”

Although Japan is the world's second-largest buyer of thermal coal after China, shipping in 101 million tonnes last year, Mr Kakimi said Japan remains a tough market to crack. He said “Some Japanese utilities are still very conservative and prefer to buy under annual term contracts.”

Source - Reuters

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