In the latest reminder that coal still dominates the world’s biggest energy consumer, Chinese power producers are warning of supply tightness, while one northern province plans to pause switching homes and industries to natural gas to avoid further heating shortages.
Four of China’s biggest generators sent an “emergency report” dated Jan. 22 to the National Development and Reform Commission, the top economic planner, requesting help with thermal coal supply, China Business News reported.
Meanwhile, Hebei, which surrounds Beijing, is to stop approving coal-to-gas conversions in rural areas until a new natural gas supply can be secured.
Photo: Reuters
The nation has struggled for two years with Chinese President Xi Jinping’s (習近平) drive to reform the coal industry and use cleaner fuels.
Efforts to limit coal supply in 2016 and encourage gas use last year overshot goals, causing price spikes and supply squeezes that sent regulators scrambling to restore balance.
China Shenhua Energy Co (神華能源), the nation’s largest coal producer, yesterday led gains among miners in Hong Kong, rising as much as 7.8 percent, before closing up 4 percent at HK$24.75.
Thermal coal futures on the Zhengzhou Commodity Exchange traded as high as 679.8 yuan (US$107) a tonne, the most in more than six weeks.
“With or without the urgent call from the power utility companies, the government is already doing what it can to ensure coal supply, including relaxing limits on imports and asking miners to take fewer days off around [the] Lunar New Year,” Shanxi-based Fenwei Energy analyst Zeng Hao said. “Coal prices will likely increase in the near term and will remain strong through the first quarter.”
The report to the commission from the four generators — China Huaneng Group (華能集團), China Datang Corp (中國大唐), China Huadian Corp (中國華電) and State Power Investment Corp (中國國家電力投資) — urged regulators to allow miners to operate at full capacity before the Lunar New Year and increase imports.
They also sought greater government control on prices and a cap on transportation fees.
China Guodian Corp (中國國電), which merged with Shenhua’s parent company last year, was not included in the letter.
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