China Raises Coal and Gas Imports to Counter Energy Crisis
China’s energy crunch pulled in more coal and gas imports in September, as buyers scrambled to ensure adequate supplies to counter a deepening power shortage ahead of peak winter demand. Flooding in a key coal producing province has worsened the supply outlook, with electricity shortages and rationing expected to continue into early next year.
China, the world’s largest coal consumer, has been grappling with a growing energy energy crisis brought on by shortages and record high prices for the fuel. The government has taken a range of steps to boost coal production and manage electricity demand at industrial plants, while power producers and other coal users have been ramping up imports.
On Tuesday, the government took its boldest step in a decades-long power sector reform by allowing coal-fired power plants to pass on the high costs of generation to some end-users via market-driven electricity prices, adding to worries about building global inflationary pressures.
Data on Wednesday showed China’s coal imports last month rose to their highest levels so far this year. Imports totalled 32.88 million tonnes in September, up 76% from a year earlier, data from the General Administrator of Customs showed. The monthly tally was the fifth highest on record, according to Reuters calculations.
Local governments in top Chinese coal producing areas Shanxi and inner Mongolia have ordered some 200 mines to boost output, but incessant rain has flooded 60 mines in Shanxi. Four mines with a combined annual output capacity of 4.8 million tonnes remained shut, a Shanxi official told a news conference on Tuesday.
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