Thermal coal demand spikes as Chinese power disrupted
Thermal coal spot prices surged as heavy snow threatened power supplies in northern China recently, and offshore oil and gas operations were also affected.
By Sam Collyer – www.lloydslistdcn.com.au
The Chinese Government sent soldiers to Qinhuangdao Port to help supply coal to power stations in a bid to avoid widespread power failures.
Offshore oil and gas operations were also affected.
Other parts of China have had to reduce power consumption to prioritise heating.
Eighty per cent of China's power needs are fuelled by coal, almost all of which has historically been supplied domestically.
However, China became a net importer of thermal coal last year, sourcing about 50 million tonnes of the product from overseas.
Thermal coal spot prices have peaked above US$100 per tonne as China goes looking for the commodity as far afield as Columbia.
News of China's concern about coal supplies will add to pressure in Australia for continued coal export infrastructure expansion.
It comes as the port of Newcastle, Australia's biggest thermal coal port, battles a queue of more than 50 ships, which will mostly deliver coal to power stations in Japan and South Korea.
According to Newcastle Port Corporation figures, bulk carriers are waiting an average of 15 days to load.
Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au
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