BEIJING, Oct 13 (Businesshala) – China’s thermal coal prices hit a fresh record high on Wednesday as recent floods in the major coal-producing province of Shanxi exacerbated supply shortages, just as Beijing tried to liberalize electricity prices. The new efforts fueled the demand for power generators.
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.
Local governments in top coal producers Shanxi and Inner Mongolia have ordered some 200 mines to boost 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 October Zhengzhou thermal coal futures rose 8% to 1,781 yuan per tonne in early trading on Wednesday, a 124% year-on-year rise. November futures rose 9.4% to over 1,800 yuan.
The coal boom comes a day after Beijing announced it would allow power plants to charge market-based prices to commercial customers for electricity, in a significant break from a previous policy that allowed the industry to negotiate fixed-price deals with suppliers. Power deals were allowed to be closed.
The policy change, which is expected to spur more coal-fired power generation, is the latest in measures designed to ease power supply shortfalls that have forced several industry sectors in China to limit their use of electricity in recent weeks. forced to curb. (Reporting by Gavin Maguire and Shivani Singh; Editing by Lincoln Feast.)