China’s Communist Party bans Australian coal imports, causing mainland coal prices to soar. Diagram of coal.
The mainland has now reached the off-season of the coal market, but the mainland coal is soaring high, with high quality coal quoted at nearly 800 yuan (RMB, same below) per ton, increasing the procurement cost of coal power companies by an additional 47 billion yuan in the first quarter of this year. Some mainland industry sources said that the lack of imported coal resources and the sharp rise in coal prices since last winter have had a huge impact on the operations of coal power companies.
According to China Energy News on April 26, as of April 20, the CECI Caofeidian Index 5500 calorie price reached 771 yuan per ton, which is not only higher than the upper limit of the green range of 570 yuan per ton set by the National Development and Reform Commission of the Communist Party of China, but even hit a new high after the Yellow New Year, significantly exceeding the affordability of power plants.
People from industry associations, production areas and trade said that in recent days, another wave of coal mines in Yulin have issued price adjustment notices, with individual offers of high-quality coal close to 800 yuan per ton. Although the origin price has exceeded last year’s historical high, coal pulling trucks are still waiting in long queues to pull coal.
Some industry sources said: “In fact, since the second half of last year, the overall price of coal has hit new highs for many years. By March this year, coal demand off-season, prices continue to rise irrationally.” Many power companies reflected that the incoming coal price in the first quarter was super high, reaching an average of more than 760 yuan/ton. Like the spot price in North Port has exceeded 800 yuan / ton, for power plants without medium and long-term contract security, the purchase means a sure loss.
For the reason that the continental coal prices continue to rise, the CEC fuel branch deputy secretary-general Ye Chun said, subject to the influence of Inner Mongolia coal resources, such as rectification, limited growth in domestic coal production, plus the lack of imported coal resources, since last winter, coal prices rose sharply, causing a huge impact on the operation of coal power companies.
Ye Chun revealed that in the first two months of this year, the four major power generation group coal power enterprises Huaneng, Datang, Huadian, State Power Investment average unit price of standard coal to the plant reached 805 yuan per ton, up 136 yuan per ton year-on-year. In the case of increased volume and price, the procurement cost rose by more than 20 billion yuan year-on-year, and the loss of the four major power companies reached 40.6%. Preliminary estimates for the first quarter of this year, the entire China coal power enterprises coal procurement costs will increase by an additional 47 billion yuan.
According to CEC’s power industry fuel statistics monitoring, as of April 20, nearly 130 major coal-fired power plants on the mainland had less than 7 days of available inventory, an increase of 62 from the same period last year. With the current supply situation observed, the existing coal inventory of power plants will be a major challenge in the face of the summer electricity peak.
Ye Chun believes that “continued for many years of large losses so that power companies are cash-strapped, financing difficulties, income is not enough to maintain normal power production, inevitably affect the security of power supply and national livelihood in the long run.”
Since October last year, the Chinese Communist authorities have banned the import of Australian coal, causing a shortage of coal on the mainland and soaring prices. Many regions have had to restrict power to factories because of the lack of coal, causing enterprises to be underemployed, and some foreign trade processing plants in coastal provinces have been underemployed, affecting delivery dates.
The deterioration of relations between Australia and the Chinese Communist Party stems from the Australian government’s public call last year for an independent international investigation into the origins of the Chinese Communist virus (Wuhan pneumonia), which infuriated the Chinese Communist Party by increasing high tariffs or banning imports of coal, barley, wine, seafood, sugar, timber, meat, lobster and other goods exported from Australia to the mainland.
However, this move by the Chinese Communist Party did not bring the Australian government to its knees and the goods have successfully found alternative export markets without causing too much impact on the Australian economy.
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