China Utilities:Power:Slower coal price decline

- Price: 19% off peak: Qinhuangdao coal (5,500kcal) price fell by Rmb143/ton overthe past nine weeks to now Rmb598/ton. The pace of the decline has been onaverage Rmb15/ton per week. However, the price only fell by Rmb3/ton last week.

- NDRC index shows less volatility than QHD prices: National Development andReform Commission (NDRC) just reported its December national coal (5,000 kcal)price indices (reflecting coal prices at which coal is procured by local power plantsnationwide). The index rose by 2.5% mom, vs. the 10% mom decline for QHD coalprice (a local seaborne price index). Only six out of 32 provinces have reported momdecline in NDRC coal prices. We think it is normal to see delay in price responsesbetween the two indices given their different natures and scopes.