NDRC: Power plants’ coal demand 100% covered by contracts

China’s top economic planner said mid- and long-term contracts have fully covered coal consumption at power plants on the whole, and it will continue to focus on contract implementation to ensure power supply security.

Power consumption has been climbing in China since the beginning of the summer, fueled by persistent and widespread hot weather and economic rebound.

This, compared with insufficient hydropower generation, posed a big challenge for the country’s coal supply, said Jin Xiandong, one official with the National Development and Reform Commission (NDRC), at a press conference on August 16.

Coal consumption averaged 8.16 million tonnes a day for power plants across the country during August 1-14, a 15% rise from the same period last year, the official said. The daily use hit a record high of 8.49 million tonnes on August 3.

Despite increased difficulty to meet demand, the country has managed to maintain relatively sufficient coal supply. Recently, coal stockpiles at power plants under unified dispatch reached as high as 175 million tonnes, up 74 million tonnes or 73.3% from the same period a year ago, Jin introduced.

“By far, term contract supplies have fully covered coal demand of power plants,” he said.

China’s coal production reached 372.66 million tonnes in July, a 16.1% rise year on year, showed the latest data from the National Bureau of Statistics. This brought the total production to 2.56 billion tonnes in the first seven months, up 11.5% year on year.

The NDRC will continue to accelerate the release of advanced coal production capacity in major production areas, strengthen the supervision on contract fulfillment, to ensure the country’s energy security, Jin said.

With more term contracts, spot prices have been close to the government-set price cap of 1,155 yuan/t for the benchmark 5,500 Kcal/kg NAR coal at northern transfer ports.

The market rose moderately on increased demand this week, driven by persistently high temperature. In the central and east of the country, temperatures have exceeded 40 Celsius again although the autumn has arrived.

Note: This article has been exchanged under the article exchange agreement between CoalMint and Sxcoal.