China is on track to import this month the highest volume of thermal coal, the one used in power generation, since at least 2017, as electricity demand is rising with the colder weather.
Chinese thermal coal imports are set to be at 37.5 million metric tons for November, according to data by commodity analysts Kpler cited by Reuters’s columnist Clyde Russell. This estimated volume would be significantly higher than the 32.12 million tons of thermal coal imported in October and the highest level in data compiled by Kpler going back to 2017.
China is also boosting its domestic coal mining and supply as it looks to ensure enough supply. The soaring domestic output in recent months has been capping seaborne coal prices for exports out of Indonesia and Australia, the two biggest exporters of thermal coal in the world.
So, despite record-high coal imports in China, thermal coal prices haven’t spiked.
In October, China’s coal output increased by 4.6% from a year earlier, to 410 million tons, data from the Chinese National Bureau of Statistics showed earlier this month.
Coal imports jumped by 28.5% in October from the same month last year, the data showed.
China has been ramping up thermal power generation, which is mostly coal, since the beginning of the autumn, when hydropower generation began to ease.
Last month, thermal power generation went up by 1.8% from a year earlier, per official Chinese data. At the same time, hydropower generation slumped by 14.9% in October from a year earlier, marking the second annual decline in two consecutive months.
Although the share of coal in China’s electricity generation has been declining in recent years with the renewables boom, Chinese coal power generation and demand remains strong.
Coal still accounts for about 60% of China’s power generation. Hydropower saw a sharp decline in September, which boosted the use of thermal coal for power generation amid surging power demand in the world’s second-largest economy.
By Tsvetana Paraskova for Oilprice.com
