Coal prices in China are hovering near record highs on Thursday as cold weather enveloped the country’s northern regions. Meanwhile, a power crunch has widened to 17 provinces, leading to production disruption at numerous factories. Soaring energy prices have pushed producer prices by 10.7% year-on-year to a more than 25-year high in September, official data showed on Thursday.
China’s National Meteorological Center has forecast cold winter weather to continue to worsen. Temperatures are expected to fall by up to 14 degrees Celsius in many areas of China this week. These areas include Heilongjiang, Jilin, and Liaoning, which were among the worst hit by the electricity outages in September. These northern provinces, along with Gansu and Inner Mongolia, have started winter heating, which will boost coal demand and prices.
Beijing has taken several steps to ensure winter energy supplies, including by allowing 153 coal mines to expand their combined capacity by around 55 million tons in the fourth quarter. However, the domestic coal supply outlook worsened after floods hit the country’s top coal producer Shanxi this week. Reuters reported that China has allowed the release of Australian coal stuck in bonded storage after it placed an unofficial import ban nearly a year ago. Russian news agency TASS also reported that China planned to double electricity imports from Russia in November-December.
