China Struggles to Ease Power Shortage... Resumes Australian Coal Imports After 11 Months

Coal Prices Rise Again Recently... Severe Cold Expected This Winter Due to 'La Ni?a'

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Hong Kong Ming Pao reported on the 24th that China has resumed imports of Australian coal after 11 months to alleviate its power shortage.

According to China's customs authority, the General Administration of Customs, China imported 2.79 million tons of Australian coal last month. Most of it was thermal coal for power generation, and 778,000 tons were coking coal, used as raw material for steelmaking. Ming Pao reported that the coking coal had likely been stuck at Chinese ports due to customs clearance issues.

China experienced a severe power shortage as relations with Australia deteriorated. Australia targeted China by demanding an investigation into the origins of COVID-19, and China retaliated by halting imports of Australian coal since November last year. As of 2019, China imported about 38% of its thermal coal from Australia. With the sharp decline in coal supply, which is the largest source of power generation in China, coal prices soared, leading to a large-scale power shortage.

With forecasts predicting an extremely cold winter this year, Chinese coal prices are rising again.

On this day, the Zhengzhou Commodity Exchange's thermal coal futures price rose 1% to 871.2 yuan per ton. Coal prices have increased by more than 7% since the 15th. The Zhengzhou Exchange's coal futures price traded around 600 yuan per ton at the beginning of this year but surged to about 1,900 yuan per ton by mid-last month due to worsening supply shortages.

A consulting firm in Qingdao predicted that this year's winter in China will be extremely cold due to the La Ni?a phenomenon, expecting an increase in coal demand for heating. La Ni?a is declared when the average sea surface temperature in the central Pacific Ocean remains at least 0.5℃ below normal for five months or more. Temperatures can drop by as much as 3 to 5 degrees.

China has recently increased its daily coal production to over 12 million tons.

This content was produced with the assistance of AI translation services.