China to release more than 10 million tonnes of coal from reserves

BEIJING (Reuters) - China will release more than 10 million tonnes of coal from state reserves to ensure steady supply to the market, the state planner said in a statement on Thursday.

FILE PHOTO: A labourer loads coal in a truck next to containers outside a logistics center near Tianjin Port, in northern China, May 16, 2019. REUTERS/Jason Lee

The fifth such release this year will come from dozens of reserve hubs and key ports nationwide, the National Development and Reform Commission said, adding that the government would arrange further releases in line with market demand.

The four previous releases this year totalled more than 5 million tonnes.

The state planner in April urged power plants, coal miners and major coal transport hubs to boost reserves of the fuel because of concerns over tight supplies and an expected demand surge.

It had vowed to build coal stockpiles to more than 120 million tonnes in government-deployable reserves in 2021.

Benchmark spot thermal coal prices soared as high as 995 yuan ($153.89) a tonne in late June before the planner announced that it would release more coal reserves.

China also increased coal imports in June to the highest level so far this year.

The nation now has about 40 million tonnes of coal in its reserve bases.

Power loads in several eastern and southern regions, including the business hub of Shanghai, hit historic highs this week as hot weather boosted use of air-conditioning and analysts expect that average coal inventories at six coal-fired power plants in eastern China have fallen to less than 15 days worth of consumption.

China’s June electricity consumption rose 9.8% from a year earlier to 703.3 billion kilowatt hours as first-half consumption jumped by 16.2%.

A research institute affiliated to China’s State Grid estimated electricity consumption in July will be up about 12% from the same month last year.

The most-traded thermal coal contract on the Zhengzhou Commodity Exchange closed 1.9% down at 873 yuan a tonne.

($1=6.4658 Chinese yuan renminbi)

Reporting by Muyu Xu and Shivani Singh; Additional reporting by Stella Qiu; Editing by Clarence Fernandez and David Goodman