What’s new: Coal storage in power plants is expected to hit an all-time high by the end of November, according to the National Development and Reform Commission (NDRC).
China’s top economic planner said that coal supply had increased significantly in October, rising by more than 30% compared to the same period last year. From mid-November onwards, the average daily supply of coal was 8.6 million tons, with some days reaching a historical high of 9.4 million tons. On average, the supply of coal has surpassed the consumption by nearly 2 million tons, according to an NDRC statement (link in Chinese) published on Thursday.
As of Tuesday, coal inventory at power plants in the country has reached 147 million tons, NDRC’s figures show.
In a separate statement (link in Chinese) on Tuesday, China Coal Transportation and Distribution Association (CCDA) warned coal producers and distributors of a slowdown in the daily average amount of coal consumption, which has surged 21% yearly during the first 10 months this year but has only jumped merely 0.8% since mid-November. The CCDA said the slow consumption growth would continue in December.
Background: Many parts of China have suffered severe power shortages since late September. The power crunch was a result of factors such a shortfall of coal supply, an export boom, and local government efforts to curtail industrial energy consumption and meet carbon-reduction goals.
In late October, the NDRC called on coal suppliers to sign a letter of commitment to cap coal prices. At least four major coal companies and two important coal ports have signed the letter.
At the same time, coal mines have been urged by the NDRC to operate at full capacity in the fourth quarter to achieve a daily output of at least 12 million tons, provided they can do so safely. As of Oct. 24, coal inventory at power plants reached 95.69 million tons, which was 17 million tons higher than levels at the end of September, according to a statement (link in Chinese) by CCDA.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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