South Korea, the world's third-largest coal buyer, said on Monday that global coal prices could rise if Japan's damaged nuclear power plants remain incapacitated for a long time. Japan is the world's top coal importer. The economy ministry said in a statement that Asia's fourth-largest economy would have no short-term impact on its coal supply as utilities own 20-day consumable coal in their inventories, or about 4 million tonnes combined.
It noted local coal demand is estimated at about 200,000 tonnes per day. The devastating earthquake and tsunami that struck on Friday caused the loss of an estimated 9,700 megawatts (MW) of nuclear and 10,831 MW of thermal power generation in Japan, putting the onus on other plants to fill the gap.
"If repair works at Japanese nuclear reactors become long term, competition to buy steaming coal will heighten, which is projected to raise global coal prices," the Korean ministry statement said. For liquefied natural gas (LNG), South Korea, the world's second-largest LNG importer after Japan, sees no short-term impact from Japan's quake and tsunami, the statement said. It added that prices of LNG could rise and its supply might tighten due to rising demand for power generation to replace Japan's lost nuclear power.
State-run Korea Gas Corp (KOGAS), the world's top corporate buyer of LNG, and five state-run utilities have set up their own emergency task force teams to monitor daily supply and demand of raw materials for power generation, it noted.
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