China’s official customs data on Wednesday showed the country imported 32.88 million tons of coal in September. That represents an increase of 76% from a year earlier and the highest monthly import so far this year. The surge came as a tight coal supply triggered a widespread power crunch in some of China’s provinces, forcing some factories to shut operations.
Adding to the crisis, floods disrupted China’s domestic coal production. The Securities Times reported that 60 of 682 coal mines in Shanxi were suspended in the past few days, although some had gradually restarted. At the same time, two mines in neighbouring Shaanxi were also affected by heavy rainfall. Four mines with a total capacity of 4.8 million tons/year were still shut as of Tuesday, a Shanxi official said.
Shanxi and Shaanxi, along with Inner Mongolia, are China’s largest coal-producing provinces. Prior to the floods, Shanxi and Inner Mongolia have ordered around 200 mines to increase production to alleviate the ongoing energy crisis. Beijing has also allowed coal-fired power producers to hike prices by up to 20% from benchmark levels to encourage them to boost output.
However, analysts said it would not be enough to help power generators break even due to the sharp increase in coal prices. Thermal coal futures in Zhengzhou for January delivery hit an all-time high of CNY1,640 ($254.44) per ton on Wednesday. The prices have climbed nearly threefold since the beginning of the year.
