Global Times reported that shares in Daqin Railway Company China largest provider of railway coal transportation have seen a double digit decline in the last two months which is largely a result of the sluggish coal market. Shares in Daqin Railway closed at CNY 6.06 a decline of 0.16% from the previous day and a drop of 17.32% compared with two months ago.

Industry watchers said that a slump in demand for coal amid the recent economic slowdown has led to a drop in rail freight demand, which has affected the railway company's stock performance.

Daqin Railway is one of China most important coal transportation railways. It connects Datong in North China Shanxi Province, the country major coal production area with the port of Qinhuangdao in North China's Hebei Province.

Mr An Zhiyuan the information director of the official website of Qinhuangdao Ocean Shipment Coal Market affiliated to Qinhuangdao Port Co said that "The daily coal transportation volume by Daqin Railway to the port declined by around 20 percent over the last two months."

The port has also witnessed a dramatic increase in coal stockpiles over the past months. The total transportation volume for Daqin Railway's top five customers, which are all large sized companies such as Chinacoal Pingshuo Group accounted for 34% of its total sales volume in 2011.

Mr Li Chaolin coal and energy industry analyst at Henan Shenhuo International Trade Limited said that "Last year, the small-sized coal distributors had to compete to apply for Daqin Railway carriages. But recently, Daqin Railway has had to ask the coal distributors whether and when they need railway wagons."

Source - Global Times

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