https://www.miningweekly.com
Africa|Coal|Gas|Mining|Power|Proximity|Safety
Africa|Coal|Gas|Mining|Power|Proximity|Safety
africa|coal|gas|mining|power|proximity|safety

China power crisis looks set to spur rush for the dirtiest fuel

28th September 2021

By: Bloomberg

  

Font size: - +

China’s power crisis looks set to spur it to import more coal from a wider range of producers, putting it into competition with European and Indian buyers that are also snapping up more of the dirtiest fossil fuel.

More than two-thirds of China’s electricity comes from coal-fired plants and, while more than 90% of the fuel it uses is mined locally, it’s difficult to raise local output at short notice. Looking offshore is the easier option, but that’s been complicated somewhat by Beijing’s decision to ban imports from Australia -- the world’s second-biggest exporter -- late last year.

It isn’t easy to ramp up local coal supply, given the low investment in new mines in recent years, Bloomberg Intelligence analyst Michelle Leung said in a note. Over-mining is also strongly prohibited amid safety concerns, she said.

Instead, China is likely to try and increase purchases from traditional sources. Jilin province will seek more coal from Indonesia, Russia and Mongolia to ensure power supply and heating, Governor Han Jun said in a statement.

Asia’s largest economy could also look farther afield to coal exporters like South Africa, Colombia, the US and Canada, putting it into competition with buyers in other parts of the world and adding more impetus to global price rallies. European electricity producers are snapping up coal as a shortage of natural gas forces utilities to burn it to cope with their own power crunch, while India is also running low on inventories of the fuel.

“Given the coal shortage in the country, we can expect China to ramp up its buying activity and most of it is likely to come from Southeast Asian markets due to proximity,” said Abhinav Gupta, a dry cargo research analyst at Braemar ACM Shipbroking. “Most of these coal producers are at peak capacity, which may tighten the coal market and push up prices.”

Beijing could of course decide to ease the ban on Australian coal imports, although that may not be politically palatable. BI’s Leung doesn’t think it’s likely, although Ralph Leszczynski, head of research at shipbroker Banchero Costa & Co, reckons it’s a possibility. “Soon the Chinese government might be forced into easing the ban on Australian coal, as that would allow more coal to be imported and ease some pressure on domestic coal prices,” he said.

Edited by Bloomberg

Comments

Showroom

Alco-Safe
Alco-Safe

An unmanned breathalyser that is made to be tough and simple to use. Can be used in any environment for operator-free breathalyser testing.

VISIT SHOWROOM 
Showroom image
Alcohol Breathalysers

Supplier & Distributor of the Widest Range of Accurate & Easy-to-Use Alcohol Breathalysers

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.061 0.098s - 91pq - 2rq
Subscribe Now