Higher imports to ease coal supply pressure in NE China this winter

sxcoal.com Policy,  Viewpoint,  Import & Export,  Thermal Coal 2022-09-14 15:17:07

Northeastern China may find it less hard to build thermal coal stocks in preparation for the heating season this winter, with higher imports from northern neighboring countries adding to the supply confidence apart from the persistent domestic supply guarantee campaign.

The rust belt region is prone to power coal shortage in winter due to exhausted local reserves and long heating period in the coldest season, and is heavily dependent on supplies from Inner Mongolia and Shanxi during peak demand months.

Jilin and Liaoning provinces suffered severer power shortages in late September last year due to high coal price-led insufficient coal stocks and surging residential usage, which led to irregular and unplanned power outages till March this year, according to local media reports.

However, this situation is less likely to re-appear this winter following the increased supply from Russia and Mongolia.

Russia's coal supply to northeastern China is growing rapidly and the flows are expected to further father pace in the winter heating period, the Consulate General of Russia in Harbin said on August 22.

During the first seven months, Russian coal exports to China through Zabaykalsk-Manzhouli railway port, the largest traffic junction between the two countries, surged 18.3% or 200,000 tonnes year on year, according to data from the Consulate General in Harbin. More than half of the coal imports are demanded by power plants in the three northeastern provinces.

The port received 1.30 million tonnes of Russian coal loaded in 18,000 rail wagons so far in the year, according to the Harbin railway bureau.

Thermal coal supply from Mongolia was also on the uptrend, although the flows were not directly into northeastern China.

More than 638 trucks loaded with Mongolian coal passed through China's largest inland coal port Ganqimaodu border crossing on average in the month to September 13, reaching the highest daily traffic since November 2020, Sxcoal's tracking data showed. Inflows through Ceke border crossing also reached new high since it reopened on May 25 this year.

The two major ports typically import coking coal from Mongolia, but thermal coal inflows outpaced coking coal since mid- to late August due to rising demand. Coal used for power generation accounted for around 70-75% of the total coal imports through the two ports in late August and early September.

The two ports are located in Inner Mongolia, the region that undertakes crucial power coal supply tasks to the northeastern region. Local energy bureau strengthened to enhance the coal supply work on September 9 in order to ensure supply performance.

China's sustained efforts in supply guarantee and boosting term contract fulfillment also lay a solid foundation to ensure thermal coal supply in the coal-consuming region.

As of September 8, coal stocks held by Heilongjiang, Jilin and Liaoning could cover around 44.3 days' worth of usage, relatively a high level, according to data from the China Electricity Council.

Despite high coal stocks, the council still warned of lower traffic efficiency impacted by the epidemic as the inflows of coal fell below the daily consumption.

On September 7, a meeting was held by the State Grid Corporation to carry out the power supply guarantee work and ensure sufficient power supply for the northeastern provinces in the winter heating season.

(Writing by Emma Yang  Editing by Tammy Yang)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

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