Reuters reported that China Shenhua Energy Co Ltd the country largest coal producer expects domestic supply and demand for thermal coal to remain in balance this year after posting a 19% rise in profits on the back of rising demand in the world second-largest economy.

Warning that a slowdown in macro economic growth may drag on energy demand, the state-controlled firm said China's construction of affordable housing and the upcoming winter season would remain supportive.

According to Chinese accounting standards the world most valuable coal producer said net profit for the first nine months of the year was CNY 34.18 billion versus CNY 28.71 billion a year earlier.

The result was largely in line with analyst forecasts of CNY 34.2 billion from a Reuters poll of 4 analysts.

Shenhua said in a statement to the Hong Kong stock exchange on Friday that "During the fourth quarter, guided by its annual operation target, the company will continue to enhance the overall planning and coordination of various businesses of coal, power, railway, port and shipping segments."

Calculated under international financial standards profits for the first nine months of the year totalled CNY 35.56 billion up from CNY 29.89 billion a year earlier. The integrated coal and power producer provides railway transportation services to the coal mining business and external customers. It also has a port operation that provides coal loading, transportation and storage services.

Analysts say Shenhua integrated business model gives the firm a core competitive advantage and the possibility of a material stake in Mongolia huge Tavan Tolgoi project and offshore growth potential with its Watermark project in Austraia helps cement its strong position.

Downside risks are still apparent in the production ramp up, analysts say, with weather or safety factors potentially leading to unanticipated mine closures, while changes in the power tariff system may affect the company's power business and underlying coal demand.

(Sourced from Reuters)