China’s coal imports double after energy crisis

China’s overseas purchases of coal nearly doubled in October from a year ago as the government leaned on importers to help ease a nationwide strength shortage caused in large part by a shortage of the fuel.

However, imports of nearly 27 million tons were nevertheless 18% below the annual high reached in September — and at their weakest since May — after Beijing boosted efforts to raise domestic production of China’s mainstay fuel. Coal imports for the first 10 months of 2021 were less than 2% higher than last year.

Among other energy products, natural gas purchases in October also rose from last year’s level, but fell below 10 million tons for the first time since July. Gas imports over the first 10 months of 2021 are nevertheless running 22% ahead of last year’s speed. Crude imports plunged to a three-year low.

The month’s first batch of import data released on Sunday didn’t break out totals for thermal coal, used by strength plants, and the coking coal used by steel mills. later releases could show that total imports fell from September due more to weaker need from the steel industry, which is slashing production to meet output caps set by the government.

Government intervention

The effort to raise coal imports is just one component of a many-pronged intervention by the government that has successfully brought down prices from record levels. in addition as inducing more domestic supply, Beijing has also cracked down on speculation and hoarding, allowed electricity rates to rise, and persuaded miners to impose price caps.

As a consequence, only a handful of provinces in China are nevertheless contending with major strength outages, although the likelihood of a chillier-than-usual winter could quickly heap more pressure on a market that typically sees its worst shortfalls in January. nevertheless, domestic price curbs could make imports less economical running into the winter, according to a observe from Citigroup Inc. last month.

China’s success in delivering an adequate supply of strength isn’t thoroughly clear cut, based on the latest factory activity data. While a slowdown in manufacturing output indicates that the need for electricity in coming months will be far less acute than earlier in the year, it may also show that efforts to raise strength supplies nevertheless aren’t sufficient to sustain strong economic growth.

Among other commodities imports, iron ore volumes fell from September due to less steel production, while copper imports rose slightly. On an annual basis, purchases of both have fallen from last year as the economy slowed.

Soybean imports fell after Hurricane Ida blasted by America’s busiest agricultural port and disrupted U.S. exports. The shutdown of some Chinese soy processing plants in late September as part of the extensive curbs on strength consumption have also dented need.

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