Tax hike has little impact on China coal export, UBS

Despite it would be less profitable to export coal, Chinese coal miners still prefer to sell coal abroad, said analysts with UBS in a report concerning the effect of the government's tax hike over coal exports.

Export remains a bigger attraction to the producers compared to selling coal domestically, the report said.

Increasing tax rate is barely a signal from the goverment emphasising domestic needs, especially power generators.

The real enforcement would be reducing export quotas for the latter half of 2008, which is forecast to be cut from 23 million tonnes to 15 million tonnes. UBS even noted a bigger reduction.

Besides above statements, UBS also predicted 2009 thermal coal contract price to be USD160/t.