Fossil fuel Prices in China Strike Record Highs as Surges Worsen Supply Crunch
Global energy prices soaring
Power demand in China is expected to grow as the country enters its winter heating season.
The energy situation was exacerbated by floods, which have led to a dramatic rise in coal prices.
Coal futures on the Zhengzhou Commodity Exchange rose by about 9% to a new intraday record of 1, 640 yuan ($254. 30) a ton on Wednesday. The most energetic contract, which was up simply by almost 20% in the previous 2 sessions, traded 5% increased at the midday trading crack.
Heavy rain fall and flooding in China’s key coal producing state this week prompted a shutdown of the mines. The situation has improved since, with the majority of the mines resuming operations. Experts at CCI say production in Ordos, Inner Mongolia rose to the highest price this year in recent times.
According to Bloomberg Intelligence analyst Michelle Leung, China’s coal shortage “ may ease during Oct but the country still requirements more supplies for Dec and January when the weather conditions could be the coldest. ” She said that local mines have pledged to increase output, and imports from suppliers including Indonesia are also prone to rise.
Last week, Chinese authorities ordered a huge boost in coal output in order to avert a severe power crunch. This adopted a squeeze on the fossil fuel supply, along with high prices for the commodity and option fuels like natural gas as the world struggles to meet increasing demand amid the post-pandemic recovery. China mines and consumes more than half of the world’s coal supply, with the gas accounting for more than 60% of the country’s electricity generation.
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