Authorities at Ordos county in Inner Mongolia, one of China’s major mining districts, warned coal mines to keep production in line with permitted levels despite rising seasonal winter demand and amid a supply tightness in the domestic market. It remains unclear whether output restrictions in Ordos will be extended to other parts in Inner Mongolia. The local unit of the national energy administration (NEA) did not disclose the reasons behind the restrictions.
However, market participants said the curbs were likely due to heightened precautions after some fatal mining accidents across China. China’s largest coal-producing province, Shanxi, temporarily closed all mines in Zuoquan county after at least four workers died in a mining accident on October 20. Previously, 16 workers were killed in another mining accident in southwest China on September 27.
Domestic coal consumption increases due to higher heating demand as the temperature fall in many parts of north China. Winter power loads in the southern provinces of Guangxi, Guizhou Yunnan, Hainan, and Guangdong, could be 7% higher than last year’s winter. State-owned utility China Southern Power Grid said parts of these regions could experience electricity supply tightness. Coal inventories at Qinhuangdao port stood at 5.01 million tons as of October 25, falling by 50,000 tons from a week earlier amid utilities’ winter restocking.
