A cold snap across much of mainland China has sent demand for coal soaring.
After a series of power cuts across China late last year, there have been reports of soaring coal prices and long lines of trucks waiting outside mining areas as a cold snap across much of the mainland triggered a surge in demand. The anyang power plant in Henan province has only five days left in its coal inventory.
Mr. Kong, who has been trading coal for more than a decade and now works as a manager at a coal producer, said demand for coal has continued to surge since mid-November and prices have been rising, according to Jiemian News. For traders, “this year’s earnings are ok,” but for private demand, “coal resources are too tight.”
Manager Sha perennial in The port of Huanghua, Qinhuangdao port loading. Around October last year, his company snapped up coal ahead of time at 560 yuan a tonne. It was sold two weeks ago at 760 yuan per ton. A sale of 30,000 tons of coal, not counting agency fees, brought in 6 million yuan. But he says that is not much. “Some of the big traders are making a fortune.”
According to the report, the spot price of Northern Port coal 5500K thermal coal reached 850 yuan per ton on December 31, and the spot transaction price was about 823 yuan per ton. Many industry figures believe that the rising trend of coal prices may continue to mid-January 2021.
And Mr Kong predicts that thermal coal prices could soar as high as 1, 000 yuan a tonne. That would be close to a 12-year high for coal.
Coal is a very sought-after resource at present. In some major producing areas, there has been a rare phenomenon of “queuing for coal” in recent years, and the price of coal is also rising day by day.
According to the yulin Coal Trading Center on December 30, 2020, yulin is now producing and selling coal mines, and there is no inventory. Since Dec. 23, 35 coal mines in the yulin region have raised prices by between 5 yuan and 40 yuan per ton, according to the Yulin Coal Trading Center.
“High daily consumption, low inventory” has also become a common phenomenon in downstream power plants. Individual power plant inventory available days, even down to single digits.
On December 28, Henan Anyang City development and Reform Commission issued the “Anyang City coal electrical security analysis report,” said that anyang city two thermal power plant thermal coal inventory are under the alert. Among them, datang Anyang power plant available quality coal inventory of about 40,000 tons, daily consumption of 8,000 tons, available inventory less than 5 days; Datang Linzhou power plant can use about 60,000 high-quality coal inventory, daily consumption of 6,000 tons, available inventory is only 10 days, are seriously lower than the minimum inventory warning line.
Anyang city development and Reform Commission’s explanation is that the reason for the shortage of power coal, mainly for the shortage of coal sources and transport difficulties.
Anyang city mainly procures Shanxi coal, because some coal mines stop production, Shanxi coal source is tight, coal price rises from 400 yuan to 600 yuan per ton, even if accept high price, still very difficult to buy.
Datang Anyang power plant every day into 3,000 tons of coal, a gap of nearly 5,000 tons. Datang Linzhou power plant daily into the plant 3000 tons, 3000 tons gap. It is expected that the inventory of these two power plants will continue to decline in the later period, so there is a great risk of stopping and limiting heat.
At this time, there is another overlord level cold wave hit China. The National Meteorological Center (NMC) continued to issue the highest level of “orange alert” on December 27, 2020, which covers the whole country, further escalating the demand for coal.
But a shortage of coal has forced companies in many places, such as the coastal province of Zhejiang, to cut power and start work only two or three days a week. Even government agencies and others have been notified that no air conditioners should be opened above 3℃. Despite the communist Party’s insistence that it will not affect electricity use, Guangzhou has used repairs as an excuse to cut power to its residential areas.
Foreign traders in Zhejiang province say they have not restricted power to their factories for years, a sign of the extent to which power plants are already short of coal.
In order to stabilize the Chinese people, the Chinese Communist Party called in state-owned coal producers to speak out. The seven major coal groups signed a petition declaring that they would act as “ballast” to stabilize coal supplies and keep Chinese people from freezing. Six of the seven coal groups are state-owned, including The State Energy Investment Group, China Coal Energy Group, Jinneng Holding Group, Shandong Energy Group, Shaanxi Coal & Chemical Group and Shanxi Coking Coal Group. Only Inner Mongolia Yitai group is private.
The public speculated that the state-owned companies’ outbursts were the result of repeated attempts by Chinese Communist Party officials to reassure the market that coal supplies were plentiful. Prices remained high, even as they queued up at mines to buy coal, prompting officials to seek assurances from suppliers in an attempt to reassure the public.
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