Nation acts as the chill winds of winter blow

By LIU YUKUN | China Daily | Updated: 2021-11-11 07:40
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Freight trains prepare to leave Harbin South Railway Station in Harbin, Heilongjiang province, on Friday. YUAN YONG/FOR CHINA DAILY

Producer restraint

China is not the only country working on power supply problems.

According to the International Energy Agency, an autonomous energy sector intergovernmental organization based in Paris, demand for coal this year is likely to reach the highest level since 2014, with the electricity sector accounting for 75 percent of the increase, driven by post-pandemic economic recovery.

Boyle said: "However, the global coal market is experiencing a period of producer restraint after the pandemic saw significant coal import demand destruction. Coal producers have been matching output to longer-term contractual volumes, rather than supplying into the spot market.

"In addition, activities to protect climate, along with environmental, social and governance initiatives, have played a part in the retirement of coal-fired power stations and closure of some thermal coal mines for the past couple of years.… The reduction in seaborne thermal coal supply is more a result of a previously oversupplied market in 2019, and a balancing of global seaborne thermal coal market fundamentals," he added.

A worker inspects equipment at a coal mine in Yijinhuoluo Banner, Erdos, Inner Mongolia autonomous region. WANG ZHENG/FOR CHINA DAILY

Since September, the National Development and Reform Commission, or NDRC, China's economic regulator, has allowed 153 coal mines to increase production capacity by 220 million tons per year. Some of these mines have started to raise output, with newly increased production estimated to reach more than 50 million tons in the fourth quarter.

The commission has also stepped up efforts to reduce rocketing coal prices, after the spot price of thermal coal surged from about 810 yuan ($127) per ton in late August to more than 2,500 yuan as of Oct 19, according to Global Times.

The NDRC pledged to take measures to rein in coal prices and return them to a "rational range". It also urged market regulators to strengthen supervision and crack down on illegal activities such as spreading false information, price gauging, hoarding and collusion.

Responding to the government's call, coal mines in areas such as Shanxi and Shaanxi provinces and Inner Mongolia have reduced the price of coal traded at mines.

For example, last month, China National Coal Group Corp provided some 57,000 tons of thermal coal to a power generation plant in Yingkou city, Liaoning province, for 1,200 yuan per ton. In Inner Mongolia, companies such as Mengtai Group and Huineng Group have recently adjusted the price of coal traded at mines to less than 1,000 yuan per ton.

A salesman at a coal mine in Erdos, who wanted to be named only as Ma, has witnessed fluctuations in the price and production of coal.

"The streets near our mine were packed with vehicles last month, with more than 700 of them parked nearby as drivers waited to collect coal during peak times. We had to tell them repeatedly that we were running out of stock," Ma said.

Now, things have changed. "With the government's measures to boost output and manage prices, buyers are far less worried about stocking coal," he said.

While acting to rein in coal prices, the NDRC also took measures to further liberalize coal-fired power pricing to curb irrational consumption by companies and ease power shortages.

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