China Coal Flows

China urges utilities to sign supply deals with coal miners as soon as possible

China’s state planner encouraged utilities to sign long-term purchase contracts with coal producers for next year as early as they can to secure enough supplies for this winter as coal power plants ramp up inventory for peak demand season.

The National Development and Reform Commission (NDRC) – in a statement on Monday citing an internal meeting – also repeated a pledge to secure supplies for power plants in six northern regions including Heilongjiang, Liaoning and Jilin provinces, and the industrial sector made up of the capital Beijing, Tianjin port and Hebei province.

The NDRC statement came as rallying coal prices, increasing safety checks and robust imports spurred more concerns of tight winter supplies.

In September, some power plants in Heilongjiang province issued a plea to the NDRC asking for help with securing coal supplies.

Prices of thermal coal in China have jumped more than 50 percent since the start of this year; while coking coal futures have gained about 5 percent.

The NDRC also said in its statement that relatively high level of stocks at the largest coal port Qinhuangdao and at major utilities showed the market is balanced this year.

The state planner as well encouraged efficient coal mines to increase their mining capacity.

NDRC intervened in the coal market last winter when a market rally fuelled worries of an imminent coal crunch. A flurry of measures such as capping contract prices and hiking production were taken to help ensure fuel supplies and ease market values.

Source: Coal Shastra

%d bloggers like this: