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China’s thermal coal prices surged to fresh record highs Wednesday as recent floods in a key coal producing province worsened a supply crunch, just as new efforts by Beijing to liberalize power prices boosted demand from power generators.

China, the world’s largest coal consumer, has been grappling with a growing energy crisis brought on by shortages and record high prices for the fuel. The government has taken a range of steps to boost coal production and manage electricity demand at industrial plants, while power producers and other coal users have been ramping up imports.

Local governments in Shanxi and Inner Mongolia, top Chinese coal producing areas, have ordered some 200 mines to boost output, but incessant rain has flooded 60 mines in Shanxi. Four mines with a combined annual output capacity of 4.8 million metric tons remain shut, a Shanxi official told a press conference Tuesday.

The most-active January Zhengzhou thermal coal futures touched a record high of 1,640 yuan ($254.44) per metric ton in Wednesday trade, having surged almost threefold year-to-date.

The rise in prices comes a day after Beijing announced it would allow power plants to charge commercial customers market-based prices for power, in a significant break from previous policy that allowed industry to lock in fixed-price power deals with suppliers.

The policy shift, which is expected to spur more coal-fired power generation, is the latest in a raft of measures designed to ease a power supply crunch that has forced several industry sectors in China to curb power use in recent weeks.

Despite the power constraints, data on Wednesday showed overall export growth from the world’s second-largest economy unexpectedly accelerated in September, as solid global demand offset some of the pressures on factories from power shortages and other issues.

“Although power rationing doesn’t appear to have derailed the export sector so far, there is still a risk that it could do so in the coming weeks,” Julian Evans-Pritchard, Senior China Economist at Capital Economics wrote in a note. “And while officials have made clear that the focus of power rationing will be energy-intensive sectors such as metals and chemicals, the hit to output in these industries could filter through supply chains and hurt downstream exporters.”

The country, the world’s biggest steel producer, on Wednesday directed steel mills in 28 cities to cut winter output by at least 30% to achieve output and climate goals.

Coal imports rise

China’s mammoth industrial engine, which cranks out mountains of electronics, toys, clothes and equipment for global markets, saw total power consumption in September and year-to-date rise year-on-year.

Electricity consumption in September rose 6.8% from a year earlier to 694.7 billion kilowatt hours, bringing total power use over the first nine months up by 12.9% year-on-year, the National Energy Administration said Wednesday.

China is not the only nation struggling with power supplies, which has led to fuel shortages and blackouts in some countries. The crisis has highlighted the difficulty in cutting the global economy’s dependency on fossil fuels as world leaders seek to revive efforts to tackle climate change at talks next month in Glasgow.

Data released Wednesday showed China coal imports rose last month to their highest this year.

China brought in 32.88 million metric tons of coal in September, up 76% from a year earlier, data from the General Administration of Customs showed on Wednesday. The monthly total was the fifth largest on record, according to Reuters calculations.

Last week it was reported that China has been releasing Australian coal from bonded storage but hasn’t lifted an almost yearlong, unofficial import ban on the fuel.

Exports from other key suppliers, such as Russia and Mongolia, have been curtailed by limited rail capacity, while shipments from Indonesia have been hindered by rainy weather, traders said.

Power plants are also seeking to diversify coal sources from niche markets such as Kazakhstan.

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