Data released on Wednesday also showed coal imports last month hit their highest level this year as users scrambled to address supply shortfalls.
China’s thermal coal prices hit fresh record high on Wednesday, October 13, 2021 recent floods Supply shortages worsened in the major coal-producing province of Shanxi, as new efforts by Beijing to liberalize electricity prices fueled demand for power generators.
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China, the world’s biggest coal consumer, is grappling with a growing energy crisis caused by fuel shortages and record high prices. The government has taken several steps to boost coal production and manage power demand in industrial plants, while power producers and other coal users are ramping up imports.
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Local governments in top coal producers Shanxi and Inner Mongolia have ordered some 200 mines to increase production, but incessant rains in Shanxi have flooded 60 mines. Four mines with a combined annual production capacity of 4.8 million tonnes remained closed, a Shanxi official told a news conference on Tuesday.
The most active January Zhengzhou thermal coal futures touched a record high of 1,640 yuan ($254.44) per tonne in Wednesday trade, having risen nearly three-fold year-on-year.
Data released on Wednesday also showed coal imports last month hit their highest level this year as users scrambled to address supply shortfalls.
China brought in 32.88 million tonnes of coal in September, up 76% from a year earlier, data from the General Administration of Customs showed on Wednesday. According to Reuters calculations, the monthly total was the fifth largest on record.
Reuters reported last week that China is releasing Australian coal from bonded storage, but has not lifted a nearly year-long, unofficial import ban on the fuel.
Traders said exports from other major suppliers such as Russia and Mongolia were cut short by limited rail capacity, while shipments from Indonesia were disrupted during the rainy season.
Power plants also try to diversify coal sources from niche markets such as Kazakhstan.
Chinese Premier Li Keqiang said in an online meeting with Mongolian Prime Minister Oyun-Erdin Luwsanmarai that he would be happy to see the expansion of coal trade between the two countries. Xinhua has The news agency reported late Tuesday night.
The increase in prices and coal import data comes a day after Beijing announced it would allow power plants to charge commercial customers market-based prices for electricity, in a significant break from a previous policy that had pushed the industry. was allowed to lock into fixed-price electricity deals with suppliers.
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