SHANGHAI- China's net coal imports shrank in October on ebbing demand for electricity as economic growth slows, a trend likely to to continue through the rest of the year despite a massive government stimulus plan.

China, which generates 80 percent of its electricity from coal, last week posted its first annual decline in power output during a non-holiday month for a decade, pointing to tumbling demand from energy-intensive heavy industries. [nPEK203115].

The world's top coal producer and consumer imported 3.49 million tonnes in October, down 6 percent from the previous month, while exports rose 23 percent to 2.56 million tonnes, data released by the General Administration of Customs on Monday showed.

"There is very low demand, as coal stocks are high," said a coal trader based in the southern province of Guangdong.

"And people have no interest in buying when they see prices keep falling."

Total imports for the first ten months of the year were 35.92 million tonnes, down 15.2 percent from a year earlier.

Price falls at Qinhuangdao, China's top coal shipping port, accelerating in recent weeks. Coal with calorific value of 5,800 kcal/kg has slumped 10 percent so far this month, to 790-810 yuan ($115.8 -- $118.7) per tonne.

Traders and analysts expect coal imports to further fall in November and beyond, as the outlook for demand remains downbeat.

"A significant rebound in coal imports is unlikely to happen in the next few months," said Judy Zhu, an analyst at Standard Chartered Bank.

"There are still a lot of uncertainties as to what will happen to the economy."

The Chinese government last week unveiled a mammoth $586 billion stimulus plan, but this will not be able to lift demand any time soon, analysts say.

"A rebound in electricity and coal demand is likely to happen in at least four to six months," Zhu said.

EXPORTS TICK UP

China has issued the second batch of 2008 coal export quotas of 15.9 million tonnes, according to a statement by China Shenhua Energy Co (1088.HK: Quote, Profile, Research, Stock Buzz)(601088.SS: Quote, Profile, Research, Stock Buzz), the listed arm of Shenhua Group Corp, China's top coal producer.

The long-expected issuance of the quotas will help increase coal exports, but a flood is unlikely due to high domestic prices, analysts said. 

China's coal exports in October were less than half of the 5.3 million tonnes exported in the same month last year.

"China's coal export prices are relatively high, compared to other parts of the world. And demand abroad is not as high as before the summer," said Zhu of Standard Chartered.

Coal prices for power generators in Australia, a benchmark for Asia, had fallen to $97.52 per tonne last Friday, near its lowest in 10 months, as mounting pessimism over the global economy weighed on the outlook for demand.

"Traders (in China) are resisting pressure to lower prices," said a Beijing-based trader.

"They bought coal at much higher prices, and don't want to sell at low prices."

($1=6.823 Yuan)

(Reporting by Rujun Shen; Editing by Michael Urquhart)

(Reuters, Nov 17, 2008)