Offers for physical cargoes of thermal coal in China skyrocketed this week after reports of local outages and supply disruptions.
Selling indications for so-called 5 500 NAR coal were pegged at above 2 000 yuan ($310) a ton on Monday, according to traders who asked not to be identified as they’re not authorised to speak publicly. That compares with 1 600 to 1 700 yuan a ton before the nation’s Golden Week holiday that ended last Thursday, they said.
The physical coal market in China is seeing higher prices than the nation’s futures market, where the most-active contract on the Zhengzhou Commodities Exchange surged to a record for a second day. Some mining regions across the country are being hit by flooding, complicating efforts to boost supply and halt an escalating energy crisis.
Beijing is urging domestic mines to ramp up production even as it tries to strike a balance between energy security and its carbon neutral goals. Higher prices for everything from coal to natural gas and fuels are also adding to inflation concerns, even as the country clamps down on speculative trading activities in the commodities space.