China coal prices hit record highs, early winter chill adds to energy woes

BEIJING: On Friday, China’s energy crisis deepened as cold weather swept into much of the country and power plants scrambled to stock up on coal, sending prices of the fuel to record highs.

In the world’s second largest economy, shortages of coal, high fuel prices and booming post-pandemic industrial demand have sparked widespread power shortages. Since September rationing has already been in place where at least 17 of mainland China’s more than 30 regions forcing some factories to suspend production and disrupting supply chains. Also, the most active January Zhengzhou thermal coal futures hit a record high of 1,669.40 yuan per tonne early on Friday. The contract has risen more than 200% year to date.

Steel, aluminium, cement and chemical producers are expected to face higher and more volatile power costs under the new policy, pressuring profit margins. Data on Thursday showed factory-gate inflation in September hit a record high.

On Thursday, data showed factory-gate inflation in September hit a record high. Aluminium, steel, cement and chemical producers are expected to face higher and more volatile power costs under the new policy, pressuring profit margins.

Therefore, China is not the only country facing struggling with power outages, which have led to fuel shortages and blackouts in some countries. Moreover, next month world leaders seek to revive efforts to tackle climate change at talks in Glasgow.

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