China’s energy crisis deepens, coal prices hit record high as cold weather sweeps in from the north
Image credit: TropicalTidbits, GFS
China's coal crisis deepened late last week as cold weather swept in from the north, causing coal prices to surge to new record highs. Power rationing has already been in place in at least 17 of mainland China's more than 30 regions since September, forcing some factories to suspend production and disrupting supply chains.
Shortages of coal, high fuel prices, and booming post-pandemic industrial demand have sparked widespread power shortages in the country, Reuters reports.1
The three northeastern provinces of Jilin, Heilongjiang, and Liaoning – among the worst hit by the power shortages last month – and several regions in northern China including Inner Mongolia and Gansu have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.
On Sunday, October 17, the temperatures in Beijing dropped below 0 °C (32 °F) — to -0.2 °C (31.6 °F) at 06:44 LT –, setting a record low for the mid-October period.2
Power shortages are expected to continue into early next year, with analysts and traders forecasting a 12% drop in industrial power consumption in the fourth quarter as coal supplies fall short and local governments give priority to residential users.
References:
1 China coal prices hit record highs, early winter chill adds to energy woes – Reuters
2 Beijing records lowest mid-October temperature in half century – ECNS
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