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China coal prices climb as heat boosts power demand
Benchmark spot thermal coal prices at Qinhuangdao have reversed an earlier slump and are expected to keep rising as peak coal-fired power demand is not over.
China’s coal prices have jumped in recent days as scorching heat waves across much of the country have increased electricity demand, OilPrice reports, citing the China Coal Transportation and Distribution Association.
The outlet says benchmark spot coal prices at the port of Qinhuangdao have erased a slump from earlier this month and could climb further in the coming weeks, supported by expectations for continued demand through the remaining peak season for coal-fired power consumption.
OilPrice adds that the price outlook is also being influenced by supply constraints, including new mine shutdowns in China’s top coal-producing areas. Analysts cited by the outlet also point to heat waves depressing hydropower output and wind generation, which China may offset with higher coal consumption.
According to OilPrice, the association attributed the likely direction of prices to a mix of factors, including tightening supply and growing demand, plus the view that El Niño impacts have not fully materialized. The report also notes unusually high temperatures extending into this weekend in parts of China, including areas around Beijing and Shenyang.