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China coal supply to stay tight this year

  • 14 years ago (2010-04-29)
  • David Flin
Asia 855

China’s thermal coal supply is likely to remain relatively tight for the rest of the year as demand is expected to grow and supply constraints remain, according to the China Electricity Council. It said in a report: “It is hard to see the relative tightness in thermal coal supply change in the next three quarters of the year.”

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The CEC cited low hydropower generation due to drought, as well as the effects of limited rail capacity, consolidation and large-scale safety inspections in the coal industry as key factors. The council warned that some power generators might even be forced to suspend generation due to coal shortages in central and south-western regions.

Spot prices in China have been rising since mid-April, traditionally a slack season in the coal market, as a severe drought in south-western provinces has drained hydropower and boosted demand for coal-fired power in the southern provinces.

China’s power consumption in the first quarter jumped 24 per cent from a year earlier, thanks to robust recovery of heavy industry and below average temperatures in most of the country.