China’s utilities seek more coal during Lunar New Year Holidays

5 February 2018

Platts reported that major Chinese utilities urged the country’s National Development Reform Commission to direct domestic thermal coal producers to operate at full capacities during the Lunar New Year holidays as they expect near term supply shortage amid the ongoing colder-than-expected winter. The utilities including Datang Group, Huaneng Group, Huadian Group and State Power Investment Corp said in a report that demand for coal has picked up due to weakened hydropower, colder winter and tightness in gas supply.

Additionally, due to year-end mining safety checks and upcoming Lunar New Year holidays, domestic coal production volume is likely to slip, the utilities noted.

They urged the NDRC to encourage mining companies to ramp up output during the holidays to increase the stockpiles at utilities and at northern China ports.

Stockpiles at major utilities are expected to drop to below 90 million mt before the Chinese Lunar New Year in mid-February, compared to about 100.16 million mt during the holidays last year.

As of Monday, the daily coal consumption rate at six major utilities in the coastal region hit 810,000 mt/day, with stocks lasting for about 11-12 days of consumption, compared to 757,700 mt/day as of January 2, 2018, according to Qinhuangdao Port data.

Stockpile levels at some of the power plants have dropped to below seven days of consumption, while in some extreme cases, utilities only had stocks for about two to three days, the utilities said.

Source: PLATTS