Chinese state planer calls for vigorous coal supply for utilities Policy 2017-08-11 08:35:00

Chinese state planner the National Development and Reform Commission (NDRC) said it will take vigorous measures to secure coal supply for power plants, as rallying coal prices and tight supply have aroused anxieties over household heating in this winter.

Many provinces in northern China were facing difficulties in getting enough coal for cold winter this year, impacted mainly by limited rail transport capacity and a lack of coal supply.

"We are booking the power-generating material lately, yet it is basically unavailable," said a Liaoning-based power company source.

Thermal coal prices have been spiking since this year, which weighed on power producers for surged cost. Data showed that the average price of domestic 5,500 Kcal/kg NAR coal was 611 yuan/t FOB over January-June, climbing 140 yuan/t or 29.72% from the average level in 2016.

"Railway transport capacity is also so limited, hampering coal supply for electricity producers," said the source.

"Though we talked about the issue with officials of China Railway Corporation, they attributed tight transport to a raft of food deliveries and some other cargoes," he added.

Recalling the similar situation that happened in last heating season, he said coal supply tightness in frigid northeastern China in early this year, including Heilongjiang and Liaoning provinces, did not ease until local governments took regulating measures to guarantee supply.

Northeastern China and Inner Mongolia, main coal production bases in China, were trapped in coal supply conundrum.

Lignite produced in Inner Mongolia was not allowed to flow into Heilongjiang in 2016, because the material, deemed as polluting low-quality coal, was not allowed to be transported 600 km away from the production area, he pointed out.

"However, miners fail to carry out this rule as ensuring coal supply has been the first priority amid severe shortage," he added.

It usually takes long time to ship coal to many distant inland power plants like Liaoning, so it happens when the material is sold out before arriving at these utilities, the source noted.

Besides, the central government's efforts in slashing outdated coal capacity since last year greatly challenged domestic power coal supply, though the campaign did enhance the concentration of coal industry.

"We could only turn to the government after failing to get coal to burn, and government authorities reinstated production of one coal mine that was ordered to close," said a power plant in North China.

Data showed that China had or planned to shut 1,688 coal mines in 2016, with combined capacity at 251.14 million tonnes per annum (Mtpa).

Around 111 Mtpa of coal capacity had been eliminated in the first half of 2017, accounting for 74% of the year's target, showed the NDRC data.

Lots of factors should be responsible for sporadic supply shortfall and price fluctuations, said Yan Pengcheng, spokesman with the NDRC.

Rapid output growth of main coal-consuming sectors stimulated by economy rebound and insufficient hydropower generation are main reasons, he added.

Outputs of thermal power and crude steel increased 6.4% and 4.4% respectively year on year over January-May in 2017, pushing coal burns for power generation up by more than 60 million tonnes or 10.3% on the year.

"We are taking measures to alleviate coal supply shortage and will boost inbound shipments to transfer ports and regions and power enterprises that lacked coal," said Yan.

(Writing by Tammy Yang  Editing by Jessie Jia)
For any questions, please contact us by or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China Coal Daily Track (Jun 21) 2018-06-21

Thermal coal Domestic market Coal mines in Yulin, Shaanxi province expected another increase in the short run as purchase was active recently from buyers in Hebei, Shandong and Shanxi. Imp

2 China's top 3 provinces contribute 68% of raw coal output in Jan-May 2018-06-21

Northern China's Inner Mongolia, Shanxi and Shaanxi produced 67.94% of the country's total raw coal in the first five months, showed data from the National Bureau of Statistics (NBS). NBS

3 CMPort concludes trade of 50% stake in Newcastle port 2018-06-21

China Merchants Port Holdings(CMPort) has taken over 50% stake in the Newcastle port at AU$607.5 million ($457.5 million) from its parent China Merchants Group on June 14, the company announced on its

4 Chinese central SOEs' profit growth accelerates in Jan-May 2018-06-21

Profit growth of China's central state-owned enterprises (SOEs) picked up pace over January-May period this year, thanks to the deepened enterprise reform and resolve in initiative and sustainable dev

5 Hubei power plants receive 3.6 Mt coal in May, up 12% MoM 2018-06-21

Central China's Hubei province saw its unified dispatch power plants receive a total of 3.62 million tonnes of coal in May from local mines and other provinces, showed data from its provincial economi

6 Sentiment fluctuation pares thermal coal trades at China's N ports 2018-06-21

China's domestic thermal coal market saw bearish and bullish sentiments both growing in recent days, rendering traders unable to judge the market trend but stay on the sidelines. Spot pri

7 S. Korea May met. coal imports down 14.2% YoY 2018-06-21

South Korea imported 2.35 million tonnes of metallurgical coal (including coking coal and PCI coal) in May, dropping 14.18% year on year and down 13.9% from the preceding month, according to the lates

8 S. Korea May thermal coal imports decrease 20% MoM 2018-06-21

South Korea's thermal coal imports (including bituminous and sub-bituminous coal) reached 8.24 million tonnes in May, down 20.61% from a month ago yet up 4.89% year on year, the latest South Korea

9 China's rail cargo shipment hits new high in May 2018-06-21

China shipped a total 338.84 million tonnes of cargoes via railways in May, rising 11.8% from the year prior, hitting a new high since this year, said China Railway Corporation on June 20.

10 Chinese govt relaxes coal import curbs to prepare for summer high demand 2018-06-21

The Chinese government has reduced restrictions on coal imports at some southern and eastern ports on concerns about higher prices and regional power shortages, as demand for electricity jumps during

Most Read Articles

1 China's major coal miners vow to ensure supply and stabilize prices 2018-06-12

While CHN Energy announced late last week to lower their June contract coal price within the "yellow range" below 600 yuan/t, more major miners have promised to lower prices to ensure adequate supply

2 Major Chinese miners work to stabilize thermal coal prices 2018-06-11

Some leading miners in China made price adjustments in response to government's call for stabilizing thermal coal price and supply, sources said. China Energy Investment Cor

3 China to launch broader environmental inspections this month 2018-06-11

China will expand environmental inspections to more cities and regions in a new round of checks from this month to April next year, the Ministry of Ecology and Environment (MEE) said in a statement on

4 China's raw coal output rises to a new high in May 2018-06-14

China's raw coal production registered a new high in May since this year, according to official data, as miners churned out the material driven mainly by tempting profit and rallying prices.

5 China proceeds development of coal-to-oil conversion 2018-06-15

China is developing new energy sources by converting coal into diesel. The world's first coal to diesel conversion production line, in China's Inner Mongolia autonomous region, produced 8

6 China's steel mills utilisation rate falls for 3rd week on environmental checks 2018-06-12

Utilisation rate at steel blast furnaces across China fell for a third consecutive week last week as of June 8, data showed, as environmental inspections continued to weigh on operation at steel mills

7 Weekly China coal market news summary (Jun 11 – Jun 15) 2018-06-15

China to launch broader environmental inspections this month China will expand environmental inspections to more cities and regions in a new round of checks from this month to April next yea

8 CHN Energy reduces contract coal prices within 600 yuan/t, sources 2018-06-11

China Energy Investment Group, also known as CHN Energy, announced to control its monthly contract prices of thermal coal, media reported late June 8, in a way to cool down the overheated coal market.

9 China plans to create a $78 bln natural gas giant 2018-06-15

Together with its massive push to have more and more residential and industrial customers switch from coal to gas, China is aiming to overhaul the ownership of its huge gas pipeline network.

10 China's 20 large steel makers launch maintenance to improve environment 2018-06-14

A total 20 Chinese large steel makers have launched maintenances since June 11, said the Ministry of Ecology and Environment days earlier, in a move to strengthen environmental inspections at key poll